Enter the total number of shares, the price per share ($), and the margin rate percentage (%) into the Trade Margin Calculator. The calculator will evaluate and display the Trade Margin. 

Trade Margin Formula

The following formula is used to calculate the Trade Margin. 

TM = S * PPS * MR/100
  • Where TM is the Trade Margin ($)
  • S is the total number of shares 
  • PPS is the price per share ($) 
  • MR is the margin rate percentage (%) 

How to Calculate Trade Margin?

The following example problems outline how to calculate Trade Margin.

Example Problem #1

  1. First, determine the total number of shares.
    • The total number of shares is calculated to be : 50.
  2. Next, determine the price per share ($).
    • The price per share ($) is measured to be: 100.
  3. Next, determine the margin rate percentage (%).
    • The margin rate percentage (%) is found to be: 25.
  4. Finally, calculate the Trade Margin using the formula above: 

TM = #S * PPS * MR/100

The values given above are inserted into the equation below and the solution is calculated:

TM = 50 * 100 * 25/100 = 1250 ($)

FAQ

What is a Trade Margin?
Trade Margin refers to the amount of money a trader or investor must put up from their own funds to open a position in the stock market. It is calculated based on the total number of shares, the price per share, and the margin rate percentage.

How does the margin rate percentage affect the Trade Margin?
The margin rate percentage directly influences the Trade Margin by determining the proportion of the total trade value that must be covered by the trader’s own funds. A higher margin rate means a higher amount of money is needed as Trade Margin, and vice versa.

Can the Trade Margin change after the initial calculation?
Yes, the Trade Margin can change after the initial calculation due to fluctuations in the price per share or changes in the margin requirements set by the brokerage. Traders must monitor their accounts to ensure they meet the margin requirements at all times.