Margin Call Price Calculator

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✖Initial Purchase Price refers to the price at which an investor buys a financial asset when initiating a position.ⓘ Initial Purchase Price [P₀]			+10% -10%
✖Initial Margin Requirement refers to the amount of funds that an investor must deposit with a broker or exchange when opening a new futures or options position.ⓘ Initial Margin Requirement [IMR]			+10% -10%
✖Maintenance Margin Requirement refers to the minimum amount of equity or margin that an investor must maintain in a margin account to avoid a margin call.ⓘ Maintenance Margin Requirement [MMR]			+10% -10%

✖Margin Call Price refers to the price level at which an investor's margin account falls below the minimum required level.ⓘ Margin Call Price [MCP]

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Formula

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Margin Call Price

Formula

MCP = P 0 \cdot (\frac{1 - IMR}{1 - MMR})

Example

43636.36 = 120000 \cdot (\frac{1 - 0.80}{1 - 0.45})

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Margin Call Price Solution

STEP 0: Pre-Calculation Summary

Formula Used

Margin Call Price = Initial Purchase Price*((1-Initial Margin Requirement)/(1-Maintenance Margin Requirement))
MCP = P₀*((1-IMR)/(1-MMR))
This formula uses 4 Variables

Variables Used

Margin Call Price - Margin Call Price refers to the price level at which an investor's margin account falls below the minimum required level.
Initial Purchase Price - Initial Purchase Price refers to the price at which an investor buys a financial asset when initiating a position.
Initial Margin Requirement - Initial Margin Requirement refers to the amount of funds that an investor must deposit with a broker or exchange when opening a new futures or options position.
Maintenance Margin Requirement - Maintenance Margin Requirement refers to the minimum amount of equity or margin that an investor must maintain in a margin account to avoid a margin call.

STEP 1: Convert Input(s) to Base Unit

Initial Purchase Price: 120000 --> No Conversion Required
Initial Margin Requirement: 0.8 --> No Conversion Required
Maintenance Margin Requirement: 0.45 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

MCP = P₀*((1-IMR)/(1-MMR)) --> 120000*((1-0.8)/(1-0.45))

Evaluating ... ...

MCP = 43636.3636363636

STEP 3: Convert Result to Output's Unit

43636.3636363636 --> No Conversion Required

FINAL ANSWER

43636.3636363636 ≈ 43636.36 <-- Margin Call Price

(Calculation completed in 00.004 seconds)

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Created by Aashna

IGNOU (IGNOU), India

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BMS College of Engineering (BMSCE), Bangalore

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< Equity Calculators

Margin Call Price

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

Fisher Price Index

Go Fisher Price Index = sqrt(Laspeyres Price Index*Paasche Price Index)

Marshall-Edgeworth Price Index

Go Marshall Edgeworth Price Index = (Laspeyres Price Index+Paasche Price Index)/2

Maximum Leverage Ratio

Go Maximum Leverage Ratio = 1/Initial Margin Requirement

Margin Call Price Formula

Margin Call Price = Initial Purchase Price*((1-Initial Margin Requirement)/(1-Maintenance Margin Requirement))
MCP = P₀*((1-IMR)/(1-MMR))

What do you mean by Margin Call Price ?

Margin Call Price is established when the value of the margin account goes below the account’s maintenance requirements or the broker’s required amount. In order to satisfy the margin call, the investor has to sell his securities or deposit additional funds or deposit unmargined securities. The specific margin call price depends on the broker's policies and the initial margin requirements set for the securities in the account. Different brokers may have different margin requirements, and they typically express them as a percentage of the total value of the securities held in the margin account. It's important for investors to be aware of the margin requirements and to monitor their margin accounts closely to avoid margin calls, as failing to meet a margin call may result in the broker liquidating assets to cover the shortfall. It is noted that margin trading involves a higher level of risk and may not be suitable for all investors.

How to Calculate Margin Call Price?

Margin Call Price calculator uses Margin Call Price = Initial Purchase Price*((1-Initial Margin Requirement)/(1-Maintenance Margin Requirement)) to calculate the Margin Call Price, Margin Call Price refers to the minimum equity percentage expected to be held in a margin account before resulting in a margin call. Margin Call Price is denoted by MCP symbol.

How to calculate Margin Call Price using this online calculator? To use this online calculator for Margin Call Price, enter Initial Purchase Price (P₀), Initial Margin Requirement (IMR) & Maintenance Margin Requirement (MMR) and hit the calculate button. Here is how the Margin Call Price calculation can be explained with given input values -> 43636.36 = 120000*((1-0.8)/(1-0.45)).

FAQ

What is Margin Call Price?

Margin Call Price refers to the minimum equity percentage expected to be held in a margin account before resulting in a margin call and is represented as MCP = P₀*((1-IMR)/(1-MMR)) or Margin Call Price = Initial Purchase Price*((1-Initial Margin Requirement)/(1-Maintenance Margin Requirement)). Initial Purchase Price refers to the price at which an investor buys a financial asset when initiating a position, Initial Margin Requirement refers to the amount of funds that an investor must deposit with a broker or exchange when opening a new futures or options position & Maintenance Margin Requirement refers to the minimum amount of equity or margin that an investor must maintain in a margin account to avoid a margin call.

How to calculate Margin Call Price?

Margin Call Price refers to the minimum equity percentage expected to be held in a margin account before resulting in a margin call is calculated using Margin Call Price = Initial Purchase Price*((1-Initial Margin Requirement)/(1-Maintenance Margin Requirement)). To calculate Margin Call Price, you need Initial Purchase Price (P₀), Initial Margin Requirement (IMR) & Maintenance Margin Requirement (MMR). With our tool, you need to enter the respective value for Initial Purchase Price, Initial Margin Requirement & Maintenance Margin Requirement and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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