Securities Leverage & FINRA Rule 4210 Underwriting Pure Edge Computation

Margin Borrowing, Maintenance Call & Liquidation Risk Calculator

Model securities margin borrowing risk, broker maintenance requirements (25%-40%), overnight interest carry, and portfolio liquidation price triggers.

Formula: Call Market Value = Debit Balance / (1 - Maintenance Margin %); Equity = Market Value - Debit

Model Parameters

Total Portfolio Market Value ($)

Current gross market value of marginable equities and ETFs in your brokerage account.

Margin Debit Loan Balance ($)

Total borrowed cash debit balance owed to the broker.

Broker Maintenance Requirement

Minimum equity percentage required by your broker (FINRA statutory floor is 25%; house rules commonly 30%-40%).

Annual Margin Borrowing Rate

Broker margin interest rate applied to outstanding debit balance.

Stress Test Market Drawdown

Hypothetical portfolio decline percentage to simulate margin call severity.

Outputs & Underwriting Summary

Calculation Status

ADEQUATE EQUITY CUSHION

Verified Model

Liquidation Threshold Value

$57142.86

Margin Call Trigger: -42.9% market decline ($42857.14 cushion)

Current Equity & Carry Cost

$60000.00

Equity Ratio: 60.0% | Interest: $3400.00/yr ($283.33/mo)

A portfolio decline of 42.9% (portfolio value dropping to $57,142.86) will trigger a FINRA Rule 4210 margin maintenance call at a 30.0% house requirement. Annual margin carrying cost is $3,400.00 ($283.33/mo). The portfolio withstands a 20.0% stress drop with $42,857.14 in residual equity buffer.

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