Margin formulas Flashcards
1
Q
Initial purchase REG T
A
50% of initial purchase
2
Q
initial purchase minimum equity
A
$2000
3
Q
Long margin Equity
A
LMV - DR = EQ
DR= Amt of money borrowed
EQ= net worth/securities the customer fully owns
4
Q
Short margin equity
A
CR - SMV = EQ
CR= Amt of money in customer acct (sales proceeds + margin deposit requirement)
EQ= net worth in the margin acct
5
Q
Margin Minimum maintenance
Long & short account
A
Long= 25%
Short= 30%
6
Q
excess equity
A
= equity - 50% MV (LMV or SMV)
7
Q
LMV @ min. maintenance
A
= debit / 0.75
8
Q
SMV @ min. maintenance
A
= credit / 1.30
9
Q
For every $1 LMV increases…
A
$0.50 SMA is created
10
Q
For every $1 SMV decreases….
A
$1.50 SMA is created
11
Q
Equity %
A
= equity / MV (LMV or SMV)
