I don’t know what others do, but I equate the following values. I hate to remember long equations like the one above which I can derive logically in 15 seconds.
Lets say current stock price is x where he gets a margin call
300x - 4000 = .30 x 300x
(4000 is the money that investor borrowed, so his equity today is 300 x - 4000 which is only 30% of the total equity)
Lets say current stock price is x where he gets a margin call
300x - 4000 = .30 x 300x
(4000 is the money that investor borrowed, so his equity today is 300 x - 4000 which is only 30% of the total equity)