Margin DRIP Calculator

How the Margin Calculator Works

⚡ Leverage Amplification: Using margin allows you to control more shares than your cash would normally buy, potentially amplifying both gains and losses.

💳 Interest Charges: Borrowed funds incur monthly interest charges that compound over time. Interest is calculated after dividends are processed, so you only pay on net debt.

⚠️ Margin Calls: If your portfolio value drops too much, you may be forced to sell shares to meet maintenance requirements.

🔄 Automatic Rebalancing: The calculator maintains your target leverage by borrowing more or paying down debt as needed. Every dividend payday the calculator will either pay down margin or reinvest dividends depending on your leverage. On the last day of the month, the calculator will sell shares to de-leverage if necessary.

This tool simulates historical performance using real market data. Margin amplifies both risk and reward - you can lose more than your initial investment.

Historical Backtesting
Risk Warning: Margin amplifies gains and losses. You can lose more than your investment. Don't bet the farm on these calculations, there's probably a bug or math that won't math hiding in here.

Margin Settings

1x 1.5x 2x
1x 1.5x 2x
1x 1.5x 2x

Portfolio Configuration

Ticker

Ticker

Total: 100%

How Margin Trading Works

⚡ Leverage Amplification

Margin allows you to control more shares than your cash would normally buy. For example, with 2x leverage, $100k becomes $200k of buying power. This amplifies both gains and losses.

💳 Interest Charges

Borrowed funds incur monthly interest charges that compound over time. These charges reduce your net returns and must be factored into your strategy.

⚠️ Margin Calls

If your portfolio value drops too much relative to your debt, you may be forced to sell shares to meet maintenance requirements, often at the worst possible time.

🔄 Rebalancing

The calculator automatically maintains your target leverage by borrowing more or paying down debt as market values change, within your tolerance. Every dividend payday the calculator will either pay down margin or reinvest dividends depending on your leverage. On the last day of the month, the calculator will sell shares to de-leverage if necessary.

⚠️ Important: This calculator shows historical performance using real market data, but past results don't guarantee future performance. Margin trading significantly increases risk - you can lose more than your initial investment. Always understand the risks and consider consulting a financial advisor before using margin.

How We Calculate Your Margin Returns

Every month, we simulate what happens to your portfolio on the last trading day. Here's the play-by-play:

1. Withdrawal Hits First

Your monthly withdrawal is added to your margin debt right away. This increases your leverage before we even look at dividends.

2. Dividends Work Smart

Throughout the month, each dividend makes a choice based on your leverage at that moment:

  • If leverage is too high → pays down debt
  • If leverage is comfortable → buys more shares

Since your withdrawal already increased debt, dividends naturally prioritize covering it when needed.

3. End-of-Month Tune-Up

Finally, we check if your leverage needs adjusting:

  • Interest: Interest is calculated on the remaining debt after dividends are applied and added to the debt.
  • Margin Call: If equity drops too low, we force-sell to the soft max level
  • Rebalancing: Otherwise, we buy or sell to maintain your target leverage

Key Concepts

Leverage: Portfolio Value ÷ Your Equity (NLV)

Soft Max: 90% of your max leverage - where we target during forced sales for safety

NLV: Net Liquidating Value = Portfolio Value - Margin Debt

The magic is that your withdrawals are automatically handled - when they push leverage too high, incoming dividends pay down debt instead of buying more shares.