Margin level calculation

Formula:

( Purchased Value Minus Cash )   Divide /  (market value for:  share and margined share value )  x 100%

Case for illustration:
Cash : RM100k into margin ac.
Max can margin (loan ) : 1.2times aka Rm120k
Total share value can buy Rm220,000 (RM100k plus RM120k)


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Example of : No Loan

If you put in Cash Rm100k  ; and bought RM100k share only.

You did NOT loan.

Hence:   No interest charge.

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Example: If borrow 20k:

If you put in RM100k;  bought RM120k share; you borrow RM20k loan for buying share

Margin level:

(120k -100K = 20k )      Divide/        (  Rm120k )   x    100% =  16.6%

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Example: Use Maximum Rm220k

If you put in RM100k;  bought RM220k share; you borrow RM120k loan for buying share

Margin level:

( 220k -  100k  = 120k )    /    (  Rm120k + Rm100k  )   x 100% =  54%

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Example: Use 80% of Rm120k(max margin or loan)  = Rm96000

If you put in RM100k;  bought RM196,000 value share; you borrow RM96k loan for buying share

Margin level:

( RM196,000 -  RM100,000 )    /    (  Rm196,000  )   x 100% =  48%

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Example: Use 50% of Rm120k(margin margin or loan)  = Rm60,000 

If you put in RM100k;  bought RM160,000 value share; you borrow RM60k loan for buying share

Margin level:

( 160k – 100k = Rm60k )    /    (  Rm160,000  )   x 100% =  37.5%