How to Calculate Maintenance Margin

Maintenance margin is the single number that decides whether you keep a leveraged position or have it closed out from under you. Most traders never calculate it on purpose — they learn it the moment a margin call lands. This walks through the formula, a worked example, and the exact price where the call gets triggered.

What maintenance margin actually is

When you trade on margin, you borrow part of the position value from your broker. Maintenance margin is the minimum equity you must keep in the account to hold that position open. Drop below it, and the broker either asks you to add funds (a margin call) or liquidates the position to protect its loan.

Think of it as a floor under your equity. Initial margin lets you in the door; maintenance margin is the line you cannot fall through while you stay in the trade.

Initial margin vs maintenance margin

These two get mixed up constantly. They answer different questions:

Maintenance is always less than or equal to initial. The gap between them is your breathing room before a call.

The maintenance margin formula

The core calculation is simple:

maintenance margin = position market value × maintenance margin rate

If you hold $20,000 of stock at a 25% maintenance rate, you must keep at least $5,000 of your own equity in the position. The other $15,000 can be the broker's money. The catch: position market value moves every tick, so the dollar requirement moves with it.

A worked example

Say you buy $20,000 of a stock on 50% initial margin:

• You put in $10,000 of equity; the broker lends $10,000.
• Maintenance rate is 25%.

As the price falls, your equity (market value − loan) shrinks while the loan stays fixed at $10,000. The position hits trouble when your equity drops to the maintenance requirement (25% of the current market value).

The price that triggers a margin call

For a long position, the margin-call price is:

margin call price = purchase price × (1 − initial margin rate) ÷ (1 − maintenance margin rate)

Plug in our numbers (initial 50%, maintenance 25%):

= purchase price × (1 − 0.50) ÷ (1 − 0.25)
= purchase price × 0.50 ÷ 0.75
= purchase price × 0.6667

So a stock bought at $100 gets a margin call at about $66.67 — a 33% drop. Buy the same stock on thinner margin or hold it at a higher maintenance rate, and that trigger price climbs much closer to your entry.

Rather than work the algebra by hand each time, drop your numbers in here:

How it works in forex and futures

The formula above is the stock (Reg T) case. In leveraged products the mechanics are the same but the inputs differ:

• Forex / CFDs: maintenance margin is usually a percentage of notional value, and many brokers express it through a margin level (equity ÷ used margin). Drop under 100%, and a stop-out closes positions automatically.
• Futures: the exchange sets a fixed initial and maintenance margin per contract in dollars, not a percentage. When your account equity falls below maintenance, you must top it back up to the initial level — not just back over maintenance.

The principle never changes: there is a floor, and crossing it forces action.

Three ways to stay clear of the line

Calculating maintenance margin tells you where the cliff is. Staying away from it is a separate discipline:

1. Size the position from your risk, not your buying power. Just because margin lets you take a position this large does not mean you should. The Position Size Calculator sizes to a fixed dollar risk instead.
2. Know your recovery math. A position close to a margin call is usually already deep in drawdown, where the gain needed to recover grows non-linearly.
3. Decide the exit before the entry. A pre-set stop with the Stop Loss Calculator gets you out on your terms, well before the broker gets you out on theirs.

A margin call is the market telling you the position was too big for the account. The goal of calculating maintenance margin in advance is to never hear that message.

Disclaimer

This is an educational tool and article, not investment advice. Margin rules vary by broker, instrument, and jurisdiction — always confirm the exact initial and maintenance rates with your broker. Trading on margin amplifies both gains and losses and carries a real risk of losing more than your initial deposit.