Financial Calculation Summary • Investing
Calculate the exact stock price that triggers a margin call for long or short positions. Stress-test portfolio drops, FINRA/house maintenance margin, and cash needed to restore equity.
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For informational & planning purposes
Calculate the exact stock price that triggers a margin call for long or short positions. Stress-test portfolio drops, FINRA/house maintenance margin, and cash needed to restore equity.
Use your broker's actual house maintenance requirement. House rules are often higher than FINRA's 25% long / 30% short minimums, especially on volatile stocks.
safe risk
Your account is in good standing with a healthy equity cushion above maintenance.
Current margin
50.0%
Decline to trigger
-33.3%
Current equity
$50,000.00
Key Takeaway: Account margin decreases from 44% (-10%) to 0% (-50%), a net change of -44% (-100.0%).
Stressed position
$80,000.00
Stressed margin
37.5%
Cash needed to restore
$0.00
Add funds
Deposit cash or eligible marginable securities to increase account equity.
Reduce exposure
Sell part of the long position before maintenance requirements are breached.
Check house rules
Confirm your broker's house margin requirements and forced liquidation policy.
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Methodology
The margin call price is the market price at which account equity, divided by position value, equals the maintenance margin. Cash restores the account when equity is brought back up to position value times that maintenance percent.
Margin Call Price = Loan Per Share / (1 − Maintenance Margin %) or Purchase Price × [(1 − Initial Margin %) / (1 − Maintenance Margin %)]
Margin Call Price = Short Sale Proceeds Per Share / (1 + Maintenance Margin %) = (Initial Short Price × (1 + Initial Margin %)) / (1 + Maintenance Margin %)
Current Margin % = (Position Value − Margin Loan) / Position Value
Cash Deposit Needed = Margin Loan − [Stressed Position Value × (1 − Maintenance Margin %)]
The long call triggers at $33.33. A drop to $30 requires a $250 cash deposit to restore 25% equity without selling shares.
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Guide
Long margin call price = Loan Per Share / (1 − Maintenance Margin). The same level = Purchase Price × [(1 − Initial Margin) / (1 − Maintenance Margin)]. Short margin call price = (Initial Short Price × (1 + Initial Margin)) / (1 + Maintenance Margin). Current margin = (Position Value − Margin Loan) / Position Value.
Choose Long position or Short position. Long accounts are called when the stock falls. Short accounts are called when it rises.
Enter the position value, or switch to Per share and enter the number of shares and the initial share price.
Enter the margin loan. On a new long purchase, loan per share is purchase price × (1 − initial margin). At $50 with 50% initial margin, the loan is $25 per share.
Enter the maintenance margin. Use 25% for the FINRA long-stock baseline, 30% for a short, or the higher house requirement in your margin agreement.
Read the margin call price and current margin. Move the stress-test price drop slider to see the cash deposit needed to restore maintenance.
Before trading on margin or reviewing a concentrated position, use this tool to estimate the trigger price, equity cushion, stress-case cash requirement, and actions to consider before a broker-issued call.
Compare the quoted margin call price with your broker's house requirement before you treat the number as a trading level.
Share price, or position value, where equity equals the maintenance requirement.
Interpretation: For a long, a lower maintenance margin moves this price down. For a short, a higher maintenance margin moves it closer to the short price.
Equity divided by position value.
Interpretation: Above maintenance, the account has a cushion. At or below maintenance, the broker can issue a call.
Deposit that brings equity back to stressed position value times the maintenance percent.
Interpretation: Selling shares changes the loan and the position. This figure assumes you add cash and keep the shares.
Add cash, trim the position, or confirm the house requirement before a volatile session.
An investor buys 100 shares at $50, borrowing $2,500. Maintenance margin is 25%. They want the price that triggers a margin call and the cash required if the stock falls to $30.
The call price is $25 / 0.75 = $33.33 per share. At $30 the position is worth $3,000 and a $250 deposit restores maintenance equity. This estimate holds the loan constant and ignores interest, dividends, and the broker's liquidation policy.
Still have questions? Check our financial glossary for definitions or explore our learning resources.
A margin call occurs when the equity in a brokerage account falls below the broker's required maintenance margin. For a long position, falling prices reduce account equity while the margin loan remains outstanding. For a short position, rising prices increase the cost of replacing borrowed shares.