Find your profit margin and markup, the cash needed to buy stock on margin, or the margin needed to trade currency.
Give any two of the four values and the calculator finds the rest.
The cash you must hold to buy shares on margin.
The minimum balance to keep in a margin account to trade currency.
Margin and markup both describe profit, but they measure it against different things. Margin is profit as a share of revenue, the price you sell for. Markup is profit as a share of cost, what the item cost you. If something costs 120 and sells for 160, the profit is 40, the margin is 25% and the markup is 33.3%. Markup is always larger than margin for the same sale, and the two are easy to confuse when you set prices.
Enter any two of cost, revenue, margin and profit. The calculator finds the other two, along with the markup. To find the price that gives you a target margin, enter your cost and the margin you want. To find your margin on a sale, enter the cost and the revenue. Margin must stay below 100%, because profit can never be the whole of the revenue.
In investing, margin means borrowing from a broker to buy more than your cash allows. The stock calculator shows the cash you must hold when you buy shares on margin, which is the value of the shares times the margin requirement. The currency calculator does the same for currency trading, where the margin ratio, such as 20:1, shows how much you can control for each unit of your own money. Trading on margin magnifies both gains and losses, and you can lose more than you put in.
Margin is profit divided by revenue, while markup is profit divided by cost. For the same sale, the markup is always bigger than the margin. A 25% margin is the same as a 33.3% markup.
Divide your cost by one minus the margin as a decimal. To reach a 25% margin on a cost of 120, divide 120 by 0.75 to get a price of 160. Enter the cost and the margin to do this.
Margin is the share of revenue that is profit. If the margin were 100%, the cost would be zero, and a margin above 100% is impossible.
Multiply the share price by the number of shares to get the position value, then multiply by the margin requirement as a percentage. The result is the cash you must hold, and the rest is borrowed from the broker.
It means you can hold a currency position worth 20 times the money you put up. The required margin is the position value divided by 20. Higher ratios give more exposure and more risk.
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