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My broker informed me, that: If the Equity/Margin ratio drops below 5%, or the Net Liquidating Value (NLV) (based off the last traded market price) of your account drops below $200, or in the event that you lose 90% of your starting cash on hand (whichever comes first), the risk desk will make an attempt liquidate your entire position and charge a liquidation fee of $25/contract.
So I'm trying to make excel sheet to calculate that Equity/Margin ratio. If I'm trying to calculate 123 / 2000 = 6.2%, every time I lover account size percentage is going up, not down. So is there any other method to calculate this?
Thanks you
Tom
kevinkdog
Posts: 3,666 since Jul 2012
Thanks Given: 1,892
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Why not just ask the broker to explain it, or for an explanation? Get the info and exact answer directly from the source.
That is possibility, of course... I just thought, that it is common and well known thing - I wanted to discuss it more deeply after basic clarification... and that it is not discussion for broker.
kevinkdog
Posts: 3,666 since Jul 2012
Thanks Given: 1,892
Thanks Received: 7,360
Margin to Equity is the common calculation. Your broker says "equity/margin ratio"