Placing trades can feel overwhelming if you don’t understand the importance of calculating margin. A margin allows you to buy securities by borrowing money. The margin is the difference between the market value of a stock and the loan amount. Check out the sections below to see how TD offers helpful tips to understand margin calculations so you can better predict profits and losses and become a more confident, skilled investor.
Learn how to calculate margin
To calculate the margin required for a long stock purchase, multiply the number of shares X the price X the margin rate. The margin requirement for a short sale is the regular margin requirement plus 100% of the value of the security.
Margin Requirement = shares x price x margin rate percentageExamples: