I have $0 cash buying power but have loads of margin buying power because of my current marginable securities. If I make a margin trade for any amount does that mean I have 0% equity in that position and my maintenance level would be at the exact price of execution, which would lead to any drop in stock price resulting in a house call?
Fully paid marginable securities can be used to buy additional securities on margin. The formula for this is:
[ (Securities Value) x Margin % ] / [ (100% - Margin %) ]
In the US, Reg T initial margin is 50% so if you put up $10k of securities then you could buy another $10k of securities ($10k x .50 ) / (100% -50%)
In the US, maintenance margin is set is 25%. Brokerage firms can require more. this means that there must be a minimum amount of equity valued at 25% or more of the total value of the margin account.
If the maintenance level is 25% then the Maintenance level is 4/3 x the Debit Balance. In this example, 4/3 of $10k would be $13,333. This level would be reached after you lost 1/3 of your portfolio value (2/3 x $20k). At this point you would have:
$13,333 Market Value
$ 3,333 Equity
The margin is $3,333 / $13,333 = 25%. Any drop below $13,333 in position value would incur a margin call.