# How to Determine the Last Stock Price Before We Begin to Liquidate the Position on Interactive Brokers?

I do not if it is me who is wrong or Interactive Brokers' employees who do not provide a clear information by phone about How to Determine the Last Stock Price Before They Begin to Liquidate the Position

They say that for a Margin account to trade stocks the

$\text{Initial Margin} = 25 \%$ (This matches with the Buying power of IB that is 4 times the Equity)

$\text{Minimum Maintenance Margin} = 25 \%$ (This part should be different because the MInimum Maintenance Margin is less than the Initial Magin. I will explain this with an example )

According to them, the formula is:

$\dfrac{(\text{Cash borrowed}) / (\text{number of shares})}{1 - \text{margin rate}} = \text{last price before liquidation}$

Suppose that you are a day trader who are interested in holding your position during the day, from 9:30 AM to maximum 11:30 AM. In this case, and if you buy 2000 shares of MU at $\$50$per share, you will be using all of your Buying Power, and you will be receiving margin calls for any drop on MU price because $$\text{last price before liquidation} = \dfrac{(\ 100000) (1 - 0.25) / (2000 )}{1 - 0.25} = \50$$ by the way$\text{Cash Borrowed} = (\text{stock value})(1-\text{Initial Margin}) \text{Stock Value} = 2000 \text{shares} * (50 \text{dollars per share}) = \$100000$ $\text{Margin Rate} = \text{Minimum Maintenance Margin}$