Calculate your margin buying power, interest costs, and margin call price. Understand how Reg T 50% initial margin and 25% maintenance margin affect your stock trading.
Margin trading is the practice of borrowing money from your brokerage to buy securities. Under Regulation T (Reg T) set by the Federal Reserve Board, you can borrow up to 50% of the purchase price of marginable securities — this is known as the initial margin requirement. The amount you can borrow depends on the equity in your account and the securities you're purchasing.
For example, if you have $20,000 in your brokerage account, your maximum buying power using Reg T 50% margin is $40,000 (your cash divided by 50%). This means you can purchase up to $40,000 worth of marginable securities, borrowing the remaining $20,000 from your broker. The brokerage charges interest on the borrowed amount — typically between 8% and 12% annually, though this varies by broker and account size.
Your buying power is the total dollar amount of securities you can purchase on margin. It's calculated as: Buying Power = Cash ÷ Initial Margin Requirement. With Reg T at 50%, buying power equals 2× your cash. So $20,000 cash gives you $40,000 in buying power. However, you don't have to use all your buying power — you can borrow as little or as much as you want, up to the maximum.
Sarah has $20,000 in her brokerage account. She wants to buy $30,000 worth of stock at $100/share (300 shares) using margin.
Buying Power: $20,000 ÷ 0.50 = $40,000 (she can buy up to $40,000 total)
Cash Used: $15,000 — Borrowed on Margin: $15,000
Initial Equity: 50% ($15,000 / $30,000)
Margin Call Price: $15,000 ÷ (1 - 0.25) = $20,000 for the position, so $20,000 ÷ 300 shares = $66.67/share
If the stock drops to $66.67 or below, Sarah will receive a margin call from her broker requiring her to deposit additional cash or sell securities.
Margin interest rates vary significantly between brokers. The rate you pay depends on your broker, account size, and the amount you borrow. Here's a comparison of typical margin rates:
| Broker | Base Rate | On $10,000 | On $50,000 | On $100,000 |
|---|---|---|---|---|
| Interactive Brokers | SOFR + 0.5% | ~6.0% | ~5.8% | ~5.5% |
| Fidelity | 8.575% | 8.575% | 8.075% | 7.575% |
| Charles Schwab | 10.75% | 10.75% | 10.00% | 9.50% |
| Robinhood Gold | 8.00% | 8.00% | 8.00% | 8.00% |
| E*TRADE | 10.65% | 10.65% | 9.90% | 9.40% |
| TD Ameritrade | 10.75% | 10.75% | 10.00% | 9.50% |
Rates as of 2026. Many brokers charge the broker call rate plus a spread. Higher balances generally qualify for lower rates. Always check your broker's current margin rate schedule.
Brokers typically calculate margin interest daily based on the outstanding loan balance, then charge it monthly. The formula is: Daily Interest = (Loan Balance × Annual Rate) ÷ 365. Most brokers use a 365-day year and compound interest on margin loans, though the compounding effect is relatively small for typical holding periods. Our calculator uses the standard simple interest method for clarity.
After you buy on margin, your account must maintain a minimum level of equity known as the maintenance margin. FINRA and NYSE rules require a minimum maintenance margin of 25% for most stocks, though some brokers may set higher requirements (typically 30-35%). If your equity falls below this threshold, your broker will issue a margin call — a demand to deposit additional funds or securities to bring your equity back up.
The margin call price is the price per share at which your equity reaches the maintenance margin. It's calculated as:
When a margin call occurs, your broker will require you to either:
Add enough cash to your account to bring equity back above the maintenance margin. This is usually the quickest solution.
Liquidate enough positions to reduce the margin loan. Your broker may sell positions without your consent if you don't act promptly.
Transfer additional fully-paid marginable securities to your account to increase your equity.
You typically have 2-5 business days to meet a margin call. If you fail to respond, your broker may liquidate positions at any time.
⚠️ Important Warning: Margin trading amplifies both gains and losses. If the stock price drops significantly, you could lose more than your initial investment. A margin call can force you to sell at the worst possible time. Never use margin for money you can't afford to lose.
This calculator has three modes to help you understand every aspect of margin trading. Here's a complete walkthrough:
Use Buying Power mode to determine how much you can actually afford and how much you'll need to borrow before placing a trade.
Use Interest Cost mode to estimate the carrying cost of a margin position. If you plan to hold for months, the interest cost could significantly eat into your profits.
Use Margin Call Price mode to set your stop-loss orders. Knowing the exact price that triggers a margin call helps you avoid forced liquidation.
Run all three calculations regularly to monitor your margin exposure and ensure you're not over-leveraged in volatile market conditions.
⚠️ Important Disclaimer: This Margin Interest Calculator is for informational and educational purposes only. It provides estimates based on standard margin rules (Reg T 50% initial margin, 25% maintenance margin) and typical interest rate assumptions. Actual margin requirements and rates vary by broker and may change. Margin trading involves substantial risk of loss and is not suitable for all investors. Consult your financial advisor before engaging in margin trading.