Maintenance Margin: The minimum equity you have to maintain in your margin account so that a margin
Maintenance Margin: The minimum equity you have to maintain in your margin account so that a margin call does not occur. It is generally between 25% and 30% of the total value of your position.
Equity in the Account: The value of the securities you hold, minus the amount you owe to the broker. This is your actual stake in the investment.
The Formula for Margin Call:
To understand and calculate the risk of a margin call, let’s break down the relevant formulas: