From: Achievable SIE 13. Brokerage accounts 13.4. Margin accounts
Within example: “A client of yours goes long 400 shares of ZZZ stock at $20 per share. The stock rises to $30, and the investor sells 100 shares. What is the resulting equity formula?”
Can you provide any insight into where the $9,000 LMV number below came from?
“$9,000 (LMV) - $1,000 (debit) = $8,000 (equity)”
I’m currently calculating:
400 x 20 =8,000- 4,000 (50% Fed Req) = 4000
400 x 30 =12,000 - 4,000 (from above) = 8,000
100 x 30 =3,000
Since the client borrowed $4,000 and only sold $3,000, the debit value is $1,000.
Oh - is it the $12k - $3k?!
OK, updated question: Is there a document showing all the formulas for the SIE and/or a visual to see the full math on these? I don’t mind the math, I just sometimes need to see a full breakdown of it to understand the steps.
**I do have the General Information printable, but this is not on it.
Actually, I think if I had calculated the initial investment, that might have informed it. The 400x20 =8,000 + 4000 = 12,000. Then I could just subtract the 3,000 proceeds from the initial investment. Sorry if this seems circuitous, sometimes that’s the route I need to go to truly understand the subject matter.
Debit goes from $4,000 down by $3,000 → $1,000 debit
$9,000 − $1,000 = $8,000 equity
Yes, your “Oh, is it the $12k − $3k?!” is exactly right. The $9,000 LMV comes from taking the total $12,000 LMV before the sale and subtracting the $3,000 market value of the shares sold. The debit balance also drops by that same $3,000, leaving equity unchanged at $8,000.
About a formula sheet:
At this time, the only official printable we provide is the General Information sheet you already have for formulas, and it doesn’t include the margin account formulas. I’ll share your feedback with our product team so they can add these formulas in a future update.
In the meantime, I recommend writing these margin formulas directly onto your sheet, it’s not only practical, but writing them down helps you remember them better for test day.
Please let us know if there’s anything else we can do to support you as you study.