You purchased 1,200 shares of stock at $52 a share. The stock is currently selling for $54 a share. The initial margin was 70 percent and the maintenance margin is 30 percent. What is your current margin position?

Question

Quizplus · Accepted Answer

The current margin position is calculated as (Current Value of Shares - Loan) / Current Value of Shares. The initial investment was 70% of 1,200 shares at $52, which is $43,680. The loan amount is 30% of $62,400 (1,200 shares at $52), which is $18,720. The current value of shares is 1,200 shares at $54, which is $64,800. The current margin position is ($64,800 - $18,720) / $64,800 = 71.11%.

You Purchased 1,200 Shares of Stock at $52 a Share