How can one calculate the maintenance and sell down levels?
Maintenance level at 35% of current margin = 77% of initial deposit + initial margin If initial deposit is 10000 and margin limit is 10000, the customer will get a call when the balance drops to 15400, 77% of 20000 Sell down level at 25% of current margin = 67% of initial deposit + initial margin If initial deposit is 10000 and margin limit is 10000, the customer’s securities will be liquidated when the balance drops to 13400, 67% of 20000.
