How to use the leverage and margin calculator
Leverage looks at the whole account. Enter your equity and the market value of each position; use the “Add position” button for more rows. The initial and maintenance requirements default to the US minimums for stocks; change them to your broker’s figures. The market move sets the rise and fall used to show what leverage does to your returns.
Margin call price looks at one purchase. Enter the shares and the price you paid, then either your own cash or the size of the loan, and the maintenance requirement.
The formulas
Margin loan = Total position value − Equity
Buying power = (Equity − Position value × Initial %) ÷ Initial %
Return on equity = Market move × LeverageEquity is your own money in the account. Return on equity ignores margin interest and dividends.
A worked example
An account with $20,000 of equity holds three positions worth $34,500.00 in total. Leverage is 1.73×, funded by a $14,500.00 margin loan. At a 50% initial requirement the positions use $17,250.00 of margin, leaving $5,500.00 of buying power. A 10% rise in every position lifts equity by +17.25%; a 10% fall cuts it by 17.25%.
Separately, you buy 250 shares at $78.40 with $9,800 of your own cash and borrow $9,800.00. With a 25% maintenance requirement, the margin call price is $52.27, 33.33% below what you paid.
Leverage works in both directions
Leverage does not change how much the shares move; it changes how much of that move lands on your own money. In the example, 1.73× turns each 1% move in the market into about 1.7% on equity. With the same positions and $50,000 of equity, no loan is needed and leverage falls to 0.69×, so a 10% fall costs only 6.90% of equity.
Losses compound the problem. A 17.25% loss needs a larger percentage gain to recover, and the margin interest you pay on the loan reduces the return on every day the position is open. The drawdown recovery calculator shows how fast that gap widens.
The 50% and 25% rules
When you open a position under Regulation T’s 50% initial requirement, you can borrow up to half the purchase price, which caps leverage at 2.00× on new purchases. After that, only the maintenance requirement applies. With exactly 50% down and a 25% maintenance level, the price can fall by one third before a margin call. A higher maintenance requirement shrinks that room:
| Maintenance requirement | Margin call price | Fall from purchase |
|---|---|---|
| 25% (FINRA minimum) | $52.27 | 33.33% |
| 30% | $56.00 | 28.57% |
| 35% | $60.31 | 23.08% |
Putting more of your own money in pushes the margin call much further away. With $14,700 of cash, the loan falls to $4,900.00 and the margin call price drops to $26.13.
What this calculator does not include
- Margin interest, charged on the loan and usually tiered by its size.
- Broker-specific rules. House requirements, concentrated-position rules and pattern day trader rules vary by broker.
- Short positions, which have their own requirements and an unlimited potential loss.
- Gaps. If a price opens far below the margin call level, the broker may sell at a loss larger than your equity, leaving you owing money.
- Different moves in each position. The leverage tables assume all positions move together.