Use this simple initial margin formula: Initial Margin = (Initial margin requirement set by the authority) x (Total purchase price) Imagine you want to buy $20,000 worth of Company XYZ, and a ...

6 Basics of Variation Margin. Variation margin is the amount of money that is required to be posted by one party of a derivatives contract to the other party to fully collateralize the contract.

The maintenance margin requirement is used to ensure that the trader has enough equity in their account to cover potential losses on open positions. How to Calculate Margin Call – Example: ...

In order to buy an individual stock, the margin requirement is 50%, meaning if you want to buy $10,000 of a stock, you have to put in $5,000 in equity.

One caveat to buying on margin is that you’ll also have a maintenance margin requirement, which requires you to maintain a certain percentage of equity in your account. When your portfolio falls ...

Finally, in the commentary on the Proposed Rule, the CFTC stated that the end-of-day timing of calculations under Margin Adequacy Requirement “are not intended to prevent an FCM from exercising ...

Because $400 is only about 16.6% percent of $2,400, the investor would have fallen below the 25% maintenance margin requirement and could be subject to a margin call.