Effect on margin of a cash withdrawal

External question — Personal Finance Stack Exchange Author: user19035 Original post: https://money.stackexchange.com/questions/127612 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I have a Reg-T margin account with Interactive Brokers. I would like to confirm my assumptions about the effect that making a cash withdrawal on margin would have on the account. Let's say I have $200 worth of securities in the account; all of it paid for with my own cash (no margin balance), and cash balance of $0. Under these parameters, IB shows: Maintenance margin of $50 Buying power of $600 Excess liquidity of $150 Let's say I withdrew $100 in cash from the account. Because my previous cash balance was $0, that effectively means that the whole $100 is being borrowed on margin. How would that affect the numbers above? Ultimately, what I'm trying to figure out is by how much the $200 in securities in the account would have to come down in value before triggering a margin call because of the $100 loan.

External answer — Personal Finance Stack Exchange Author: Bob Baerker Original post: https://money.stackexchange.com/a/127615 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. You can disregard the Buying Power number because that relates to the 4X intraday margin that a Pattern Day Trader is allowed. The PDT requirement is $25k account value and this is only a $200 account. What you are suggesting amounts to buying $200 worth of stock with $100. The account value level at which a margin call will be triggered is: Account Value = (Margin Loan) / (1 – Maintenance Margin %) If the maintenance level is 25% then the Maintenance Requirement is 4/3 x the Debit Balance. In your example, 4/3 of $100 would be $133.33. This level would be reached after you lost 1/3 of your position's value (1/3 x $200). The numbers would look like this: Market Value Loan Equity Margin % 200.00 100.00 100.00 50% (initial position) 133.33 100.00 33.33 25% (after 1/3 drop)