Say the broker requires a init margin of 40%, and a maintenance margin of 30%.

If I buy 10000 USD worth of stock, depositing a margin of 10000 * 40% = 4000 USD. How do I calculate the required margin when the stock goes up(in my favor)? If the required margin is less than 4000 USD, does it mean the broker will release some of the margin back to my cash account to buy or short more stock?

1 Answer 1


Reg T initial margin in the USA is 50% so if your initial margin is less than that, my answer may not be applicable since it is USA centric.

A special memorandum account (SMA) is where excess margin generated from a margin account is deposited, increasing the buying power.

Here is an explanation with an example from Interactive Brokers.

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