How this number is made
A long margin position is called when equity, divided by the market value of the shares, falls to the maintenance line. Equity is the shares’ value minus the loan. This page solves for that price. It is not the broker’s house rule if the broker uses a higher line, and it is not portfolio margin. A gap through the price can skip the call and go straight to a sale.
- The loan is what you owe the broker, not the original purchase.
- Thirty percent is a common maintenance floor. Your broker’s number wins.
Formula
Call price = loan ÷ (shares × (1 − maintenance margin)). Equity percent = (shares × price − loan) ÷ (shares × price).
Worked example
With the figures already in the form, called if the price falls to is $35.71.
Questions
What about a short?
A short call works the other way: the price rising hurts. This page is a long position.
Is 50% the maintenance line?
Fifty percent is the old initial margin for a new purchase. Maintenance is often lower. Type the line in the agreement.