Margin Calculator: Profit, Stock & Forex Margin

What This Tool Does

This margin calculator actually covers three related but distinct calculations, since "margin" means something different depending on context. The Profit Margin Calculator finds margin, profit, or markup for a product or business when you enter any two of cost, revenue, and the related figures. The Stock Trading Margin Calculator finds the dollar amount a broker requires upfront to buy shares on margin, based on stock price, number of shares, and the broker's margin requirement. The Currency Exchange Margin Calculator finds the minimum amount needed in a margin account to open a forex position, based on exchange rate, margin ratio, and the number of units being traded. Enter the known values for whichever calculation applies to you, and the tool solves for the rest instantly.

You can also use this Integral Calculator.

How It's Calculated

Profit margin: Profit margin is calculated as profit divided by revenue, expressed as a percentage, where profit itself equals revenue minus cost. Markup, a related but different figure, is calculated as profit divided by cost rather than revenue — which is why the two numbers are never equal except at a 0% margin.

Worked example: A product costs $120 to produce and sells for $160. Profit = $160 − $120 = $40. Margin = $40 ÷ $160 = 25%. Markup = $40 ÷ $120 ≈ 33.33%. The same $40 profit produces two different percentages depending on whether it's measured against revenue (margin) or cost (markup).

Stock trading margin: The amount required to buy on margin is calculated as the total purchase value multiplied by the margin requirement percentage set by the broker.

Worked example: A stock trades at $18.30 per share, and an investor wants 100 shares with a 30% margin requirement. Total purchase value = $18.30 × 100 = $1,830. Amount required = $1,830 × 30% = $549. The remaining $1,281 is effectively borrowed from the broker.

Forex margin: The margin required is calculated using the exchange rate, the number of units being traded, and the margin ratio (expressed as a leverage ratio such as 20:1, meaning a 5% margin requirement).

Worked example: To purchase 100 units at an exchange rate of 1.3 with a 20:1 margin ratio, the required margin is roughly 100 × 1.3 ÷ 20 = 6.5 units of the home currency.

Edge Cases and Special Rules

• Margin vs. markup confusion: These two percentages are commonly mixed up because they use the same profit figure but different denominators (revenue vs. cost). A 25% margin and a 33% markup can describe the exact same sale.
• Negative margin: If cost exceeds revenue, margin and profit both come out negative, meaning the sale is a loss rather than a profit.
• Regulatory minimums vs. broker requirements: U.S. Regulation T sets a 50% initial margin requirement for marginable equity securities, and FINRA sets a minimum maintenance margin of 25% of current market value for long positions (30% for short positions). Individual brokers are allowed to set higher requirements than these federal minimums, and many do, particularly for volatile stocks.
• Margin calls: If an account's equity falls below the maintenance margin requirement after a price move, the broker issues a margin call, requiring the trader to deposit more funds or have the broker liquidate positions to bring the account back into compliance.
• Leverage ratio format: Forex margin ratios are typically expressed as leverage (e.g., 50:1, 100:1) rather than as a direct percentage, so a lower margin requirement corresponds to a higher leverage ratio — a 2% margin requirement is the same thing as 50:1 leverage.

Margin vs. Markup: What's the Difference

Margin and markup both measure profit, but they answer different questions. Margin asks: of every dollar in revenue, how much is profit? Markup asks: how much was the price increased above cost? Because revenue is always larger than cost on a profitable sale, markup percentages are always higher than margin percentages for the same transaction. This matters most when setting prices — a business that wants a 25% profit margin needs to apply a roughly 33% markup to its cost, not a 25% markup, which is a common pricing mistake.

Who Uses This Calculator

Small business owners and retailers use the profit margin calculator to price products and evaluate whether a sale or wholesale deal still leaves healthy profit after costs. Retail investors use the stock trading margin calculator before placing a margin order, to confirm they have enough account equity to meet a broker's upfront requirement. Forex traders use the currency exchange margin calculator to size positions appropriately relative to their account balance and the leverage their broker offers, since trading beyond what the margin account can support risks a margin call.

Initial Margin vs. Maintenance Margin

These are two different checkpoints in a margin trade, not two names for the same thing. Initial margin is the amount required to open a position — under Regulation T, generally 50% of the purchase value for marginable equity securities. Maintenance margin is the minimum equity that must remain in the account afterward, as the position's value fluctuates — FINRA sets this at 25% of current market value for long positions, though many brokers require more. A trader can meet the initial margin requirement to open a trade and still later fail the maintenance margin requirement if the position's value drops, which is what triggers a margin call.

Frequently Asked Questions

Q: What's the difference between margin and markup?

A: Margin is profit divided by revenue (selling price); markup is profit divided by cost. Both describe the same profit in dollar terms, but as different percentages, since they use different denominators.

Q: How much money do I need to buy stock on margin?

A: It depends on the stock's price, the number of shares, and your broker's margin requirement. Regulation T sets a 50% minimum initial margin for marginable equities, but individual brokers can and often do require more.

Q: What triggers a margin call?

A: A margin call happens when an account's equity falls below the maintenance margin requirement — typically after the value of securities held on margin drops. The trader must then deposit additional funds or have the broker close positions to restore the minimum required equity.

Q: What does a forex margin ratio like 20:1 actually mean?

A: A 20:1 margin ratio means a 5% margin requirement — for every $20 of currency traded, $1 must be held as margin. Lower ratios mean less leverage and a higher margin requirement; higher ratios mean more leverage and a lower margin requirement.

Q: Why is markup always a higher percentage than margin for the same sale?

A: Because markup is calculated against the smaller number (cost) while margin is calculated against the larger number (revenue), the same dollar amount of profit produces a higher percentage when divided by cost than when divided by revenue.