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

Formulas:

Amount borrowed =

- Initial Equity InvestmentInitial Equity Investment Initial Equity Percentage 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

x Margin Loan Rate (%)Holding Period in months 12 Net Income = Capital Gain + Dividends - Interest on Margin Loan

ROI =

x 100Net Income Initial Equity Investment Margin Based on Ending Price =

x 100(Shares Purchased x Ending Share Price) - Amount Borrowed Shares Purchased x Ending Share Price Price for Margin Call =Amount Borrowed Shares Purchased - (Maintenance Margin x Shares Purchased) Return on Shares without Margin =

x 100Ending Share Price - Initial Share Price + Cash Dividends During Hold Per Initial Share Price

Financial Calculators

Amortization ScheduleDebt Snowball CalculatorEMI CalculatorLoan AffordabilityLoan CalculatorMortgage Loan CalculatorPayoff CalculatorInvestment calculators

Altman Z-Score CalculatorAnnualized Returns CalculatorAPY CalculatorBuying on Margin CalculatorCAGR CalculatorCompound InterestCost of Debt CalculatorCost of Equity CalculatorDCA CalculatorNet Profit Margin CalculatorNPV CalculatorROI CalculatorShort Selling CalculatorWACC CalculatorWeight of Debt and Equity