How close is your portfolio to a margin call? The distance-to-call formula

Last updated June 2026

Borrowing against your brokerage (margin) is cheap leverage right up until it isn't. When the market drops far enough, your broker issues a margin call — and if you can't top it up fast, they force-sell your positions, at the bottom, on their schedule, often triggering taxable gains you never chose to realize. The cruel part: almost no app tells you how close you actually are. Here's the math so you always know.

The two numbers that matter

• Long market value (LMV) — the total value of the marginable positions you hold.
• Margin loan — how much you've borrowed against them.

Your equity is simply LMV − loan, and your equity percentage is equity ÷ LMV. Brokers require your equity percentage to stay above a maintenance margin — commonly 25%, sometimes higher for volatile or concentrated names. The instant your equity percentage drops to the maintenance level, the call fires.

The distance-to-call formula

The portfolio value at which a call triggers is:

call level = margin loan ÷ (1 − maintenance margin)

And how far your portfolio can fall before you hit it — the part you actually want to watch:

distance to call = 1 − (call level ÷ current LMV)

A worked example

Say you hold $200,000 of stock with a $100,000 margin loan, at a 25% maintenance requirement.

• Equity = $200,000 − $100,000 = $100,000, so equity % = 50% — comfortably above 25%.
• Call level = $100,000 ÷ (1 − 0.25) = $133,333.
• Distance to call = 1 − ($133,333 ÷ $200,000) = ~33%.

So your portfolio can fall about 33% before the broker calls. That sounds like a lot — until a concentrated tech position drops 20% in a week and your cushion is suddenly thin. The number moves every day with prices; a single headline can change it fast.

Reading the danger zone

• > 25% room: healthy — but worth knowing.
• 10–25% room: elevated — a normal pullback could put you in range.
• 0–10% room: high — one bad week from a call.
• 0% room: a call is at the door; you're at or below maintenance.

What actually protects you

Not watching it is the mistake. If you know your distance-to-call ahead of time, you have choices — pay down the loan, raise cash on your own terms, or trim a concentrated name calmly — instead of being liquidated into a crash. The leverage isn't the problem; the surprise is.

How Orbeva watches it for you

Orbeva tracks your distance-to-call continuously from your real, connected holdings and flags it long before the broker would — elevated, high, or call. It also watches concentration (when too much rides on one position) and surfaces your single highest-impact move. It's read-only — it never trades for you; it just makes sure a margin call is never a surprise.

Watch your margin risk — start free →

General information and decision support, not financial or investment advice. Maintenance requirements vary by broker and security and can change without notice; confirm yours with your brokerage.