Investing

Margin Call Price Calculator

Margin Call Calculator

Determine the stock price that triggers a broker margin call.

Margin Call Trigger Price

₹666.67

If stock falls below this price, a margin call is issued.

Broker Loan Amount (per share)

₹500.00

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Margin Call Price Threshold Formula

Margin Call Price = Purchase Price * (1 - Initial Margin) / (1 - Maintenance Margin)

Calculates the lowest stock price threshold before a margin loan account receives a liquidation call.

Worked Example: Bought stock at ₹200 with 50% initial margin and 30% maintenance margin

Liquidation margin call threshold price: **₹142.86 per share**.

Margin Calls: Protecting your trading account from forced liquidation

Anuj bought stock at ₹200 using a margin account with 50% initial margin and 30% maintenance margin. The stock began to decline, and Anuj wanted to check his safety threshold.

His margin call price was ₹142.86 per share. When the stock hit ₹140, he received a margin call from his broker requesting additional deposit cash.

A margin call occurs when account equity drops below the maintenance margin limit, requiring immediate funding to prevent forced asset sales.

Maintain a cash buffer in your margin account. Forced liquidations usually occur at the worst possible market prices.

Frequently Asked Questions

What triggers a margin call?

A margin call is triggered when the value of securities in a margin account drops below the broker's required maintenance margin, usually due to falling stock prices.

What happens if I ignore a margin call?

If you do not deposit additional funds or sell assets to meet the margin call, your broker has the legal right to liquidate (force sell) your stocks at the current market price without your permission.

How can I avoid margin calls?

Avoid using maximum leverage, maintain a buffer of cash in your account, and always use stop-loss orders to cut losing positions before they threaten your maintenance margin limits.

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