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Margin Call Price Formula

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Margin Call Price refers to the price level at which an investor's margin account falls below the minimum required level. Check FAQs

MCP = P 0 \cdot (\frac{1 - IMR}{1 - MMR})

MCP - Margin Call Price?P₀ - Initial Purchase Price?IMR - Initial Margin Requirement?MMR - Maintenance Margin Requirement?

Margin Call Price Example

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Here is how the Margin Call Price equation looks like with Values.

Here is how the Margin Call Price equation looks like with Units.

Here is how the Margin Call Price equation looks like.

43636.3636 = 120000 \cdot (\frac{1 - 0.8}{1 - 0.45})

43636.3636 = 120000 \cdot (\frac{1 - 0.8}{1 - 0.45})

43636.3636 = 120000 \cdot (\frac{1 - 0.8}{1 - 0.45})

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Margin Call Price Solution

Follow our step by step solution on how to calculate Margin Call Price?

FIRST Step Consider the formula

MCP = P 0 \cdot (\frac{1 - IMR}{1 - MMR})

Next Step Substitute values of Variables

∴

MCP = 120000 \cdot (\frac{1 - 0.8}{1 - 0.45})

Next Step Prepare to Evaluate

∴

MCP = 120000 \cdot (\frac{1 - 0.8}{1 - 0.45})

Next Step Evaluate

∴

MCP = 43636.3636363636

LAST Step Rounding Answer

∴

MCP = 43636.3636

Margin Call Price Formula Elements

Variables

Margin Call Price

Margin Call Price refers to the price level at which an investor's margin account falls below the minimum required level.

Symbol: MCP

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Margin Call Price

Initial Purchase Price

Initial Purchase Price refers to the price at which an investor buys a financial asset when initiating a position.

Symbol: P₀

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Initial Purchase Price

Initial Margin Requirement

Initial Margin Requirement refers to the amount of funds that an investor must deposit with a broker or exchange when opening a new futures or options position.

Symbol: IMR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Initial Margin Requirement

Maintenance Margin Requirement

Maintenance Margin Requirement refers to the minimum amount of equity or margin that an investor must maintain in a margin account to avoid a margin call.

Symbol: MMR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Maintenance Margin Requirement

Other formulas in Equity category

Go Maximum Leverage Ratio

MLR = \frac{1}{IMR}

Go Marshall-Edgeworth Price Index

MEI = \frac{LPI + PPI}{2}

Go Fisher Price Index

FPI = \sqrt{LPI \cdot PPI}

Go Laspeyres Price Index

LPI = (\frac{\sum (x, 1, 2, (Pi F \cdot Qi B))}{\sum (x, 1, 2, (Pi B \cdot Qi B))}) \cdot 100

How to Evaluate Margin Call Price?

Margin Call Price evaluator uses Margin Call Price = Initial Purchase Price*((1-Initial Margin Requirement)/(1-Maintenance Margin Requirement)) to evaluate the Margin Call Price, Margin Call Price refers to the minimum equity percentage expected to be held in a margin account before resulting in a margin call. Margin Call Price is denoted by MCP symbol.

How to evaluate Margin Call Price using this online evaluator? To use this online evaluator for Margin Call Price, enter Initial Purchase Price (P₀), Initial Margin Requirement (IMR) & Maintenance Margin Requirement (MMR) and hit the calculate button.

FAQs on Margin Call Price

What is the formula to find Margin Call Price?

The formula of Margin Call Price is expressed as Margin Call Price = Initial Purchase Price*((1-Initial Margin Requirement)/(1-Maintenance Margin Requirement)). Here is an example- 43636.36 = 120000*((1-0.8)/(1-0.45)).

How to calculate Margin Call Price?

With Initial Purchase Price (P₀), Initial Margin Requirement (IMR) & Maintenance Margin Requirement (MMR) we can find Margin Call Price using the formula - Margin Call Price = Initial Purchase Price*((1-Initial Margin Requirement)/(1-Maintenance Margin Requirement)).

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Margin Call Price Formula

Margin Call Price Example

Margin Call Price Solution

Margin Call Price Formula Elements

Other formulas in Equity category

How to Evaluate Margin Call Price?

FAQs on Margin Call Price

Variable Name