Buying on Margin Calculator

Calculate buying on margin amount borrowed, return on investment, and margin call.

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Return on Investment

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Margin Call

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Buying on Margin

  • Buying on margin is when an investor invests with borrowed money, which amplifies both gains and losses.

    Formulas:

    Amount borrowed =
    Initial Equity Investment
    Initial Equity Percentage
    - Initial Equity Investment
    Shares purchased =
    Initial Equity Investment + Amount Borrowed
    Initial Share Price

    Capital gain = Shares Purchased x (Ending Share Price - Initial Share Price)

    Dividends = Shares Purchased x Cash Dividends During Hold Per

    Interest on margin loan = Amount Borrowed x
    Holding Period in months
    12
    x Margin Loan Rate (%)

    Net Income = Capital Gain + Dividends - Interest on Margin Loan

    ROI =
    Net Income
    Initial Equity Investment
    x 100
    Margin Based on Ending Price =
    (Shares Purchased x Ending Share Price) - Amount Borrowed
    Shares Purchased x Ending Share Price
    x 100
    Price for Margin Call =
    Amount Borrowed
    Shares Purchased - (Maintenance Margin x Shares Purchased)
    Return on Shares without Margin =
    Ending Share Price - Initial Share Price + Cash Dividends During Hold Per
    Initial Share Price
    x 100