Long Margin Account Calculations

What this video covers

• Why equity equals long market value (LMV) minus debit balance (DR) is the starting point for every long margin problem
• How the debit balance is fixed at the loan amount and only changes through customer action or accrued interest, not market movement
• What happens when market value rises: calculating excess equity and how it is credited to the Special Memorandum Account (SMA)
• Why a restricted account (equity below 50% of LMV) is not the same as a maintenance call (equity below 25% of LMV)
• How sale proceeds are still credited to SMA at 50% even when the account is restricted
• The buying power shortcut: why buying power always equals two times excess equity or two times SMA
• How to solve for any unknown value when given two of the three variables in the equity equation