You recently purchased 200 shares of stock at a cost per share of $23.50. The initial margin requirement on this stock is 75% and the maintenance margin is 50%. The stock is currently valued at $25.00 a share. What is your current margin position? Ignore margin interest.

Question

Quizplus · Accepted Answer

The current margin position is calculated as (Current Value - Loan) / Current Value. The current value is 200 shares * $25 = $5000. The initial investment was 75% of 200 shares * $23.50 = $3525, so the loan was $4700 - $3525 = $1175. Thus, the margin position is ($5000 - $1175) / $5000 = 76.50%.

You Recently Purchased 200 Shares of Stock at a Cost