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A customer opens a long margin account with only 1 position, consisting of 100 shares of ABC stock valued at $20 per share. There is no debit balance in the account. If the customer buys 100 shares of
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A customer opens a long margin account with only 1 position, consisting of 100 shares of ABC stock valued at $20 per share. There is no debit balance in the account. If the customer buys 100 shares of XYZ at $60 per share, the margin call will be

User Herry
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Answer:

The margin call will be $6,000.

Step-by-step explanation:

Since there is no debit balance in the customer's margin account, it implies that the customer is not owing the broker on margin. The additional purchase of the 100 shares of XYZ necessitates the margin call by the broker for the customer to fund his margin account by paying additional funds worth $6,000 to cover the purchase of XYZ shares by the broker on his behalf.

A margin account is an account maintained by a broker on behalf of his customer through which the customer is able to buy and sell securities using his own funds and the broker's. The implication is that the customer's equity in the account is equal to the market value of the securities minus the borrowed funds from the broker.

User Sahil Mahajan
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