How a Margin Purchase Works
Buying on margin means funding part of a stock purchase with a loan from your broker. The initial margin sets how much of the purchase must be your own money (50% under Regulation T), and the maintenance margin sets the minimum equity you must keep as the price moves (25% under FINRA rules; brokers often require more). This calculator shows the three numbers every margin trade turns on: your buying power, the loan you are taking, and the price at which a margin call arrives.
Loan = Position value × (1 − Initial margin)
Call price = Price × (1 − Initial margin) ÷ (1 − Maintenance margin)
You buy 200 shares at $100 with 50% initial margin: the position is $20,000, your deposit is $10,000 and the loan is $10,000. With 25% maintenance margin, the call price is 100 × 0.50 ÷ 0.75 = $66.67 — a 33% fall. At that price your equity ($13,333 − $10,000 loan = $3,333) is exactly 25% of the position's value.
Leverage Cuts Both Ways
At 50% margin every price move is doubled against your own money: a 10% rise is a 20% gain on your deposit, and a 10% fall is a 20% loss — before margin interest, which accrues either way. That asymmetry of feeling, not of arithmetic, is why regulators set floors on margin at all. If you are comparing the economics of a trade rather than its financing, our profit margin calculator answers the pricing question, and the forex margin calculator covers leveraged currency positions, where leverage runs far higher.
Frequently Asked Questions
What does buying stock on margin mean?
Borrowing part of the purchase price from your broker. Under the US Federal Reserve’s Regulation T, the initial margin requirement is 50%, so a $10,000 deposit lets you buy up to $20,000 of stock. The loan is secured by the stock itself, and you pay interest on it.
What is the difference between initial and maintenance margin?
Initial margin is the share of the purchase you must fund yourself on day one (typically 50%). Maintenance margin is the minimum equity you must keep as the price moves afterwards — FINRA requires at least 25%, and many brokers set 30–40%. Falling below it triggers a margin call.
How is the margin call price calculated?
Call price = purchase price × (1 − initial margin) ÷ (1 − maintenance margin). Buying at $100 with 50% initial and 25% maintenance margin: 100 × 0.50 ÷ 0.75 = $66.67. If the stock falls below that, the broker demands more cash or sells your shares.
Why does margin amplify losses?
Your gain or loss is measured on the full position but your stake is only part of it. A 20% price drop on a 50%-margin position is a 40% loss of your equity — before interest. The same leverage that doubles gains doubles losses.
Is this the same as a profit margin calculator?
No — "margin" in trading means the collateral for a leveraged position, an unrelated calculation. For pricing and business profitability, use our profit margin calculator instead.
Sources & Further Reading
- Regulation T — initial margin requirements — Board of Governors of the Federal Reserve System
- Margin accounts and maintenance requirements (Rule 4210) — FINRA
- Investor bulletin: understanding margin accounts — U.S. Securities and Exchange Commission
Cite This Calculator
Using this calculator in an assignment, article or lesson? Copy a ready-made citation — or the link snippet if you're referencing it from a web page.
C.G. Audit Team. (2026). Stock Margin Calculator. Calculators Guide. Retrieved from https://calculatorsguide.com/finance/stock-margin-calculator/