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I have a Reg-T margin account with Interactive Brokers. I would like to confirm my assumptions about the effect that making a cash withdrawal on margin would have on the account.

Let's say I have $200 worth of securities in the account; all of it paid for with my own cash (no margin balance), and cash balance of $0. Under these parameters, IB shows:

  • Maintenance margin of $50
  • Buying power of $600
  • Excess liquidity of $150

Let's say I withdrew $100 in cash from the account. Because my previous cash balance was $0, that effectively means that the whole $100 is being borrowed on margin. How would that affect the numbers above?

Ultimately, what I'm trying to figure out is by how much the $200 in securities in the account would have to come down in value before triggering a margin call because of the $100 loan.

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You can disregard the Buying Power number because that relates to the 4X intraday margin that a Pattern Day Trader is allowed. The PDT requirement is $25k account value and this is only a $200 account.

What you are suggesting amounts to buying $200 worth of stock with $100.

The account value level at which a margin call will be triggered is:

Account Value = (Margin Loan) / (1 – Maintenance Margin %)

If the maintenance level is 25% then the Maintenance Requirement is 4/3 x the Debit Balance. In your example, 4/3 of $100 would be $133.33. This level would be reached after you lost 1/3 of your position's value (1/3 x $200). The numbers would look like this:

 Market Value   Loan   Equity   Margin %
    200.00     100.00  100.00    50%    (initial position)
    133.33     100.00   33.33    25%    (after 1/3 drop)

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