🛡️ Bulletproof Margin

Smart Money for Real People™

Most investors fear margin because they only hear liquidation horror stories. In reality, margin becomes dangerous only when it’s used irresponsibly — with volatile assets and oversized loans.

Used correctly, margin is a wealth-building engine.

At Alejos Capital Group, we teach a disciplined method called Bulletproof Margin — a structure that aims to remove margin-call risk and turn collateral into long-term compounding power.

What Is Bulletproof Margin?

Bulletproof Margin is simple:

• Own a stable, appreciating asset

• Use it as collateral for a conservative margin loan

• Pay interest, not principal

• Let the underlying asset grow over time

• Maintain a large margin cushion so you never face a margin call when structured correctly

It’s the same playbook private banks use when they lend against homes, art, and investment portfolios — but applied to gold.

Margin Cushion: How Far You Are From Danger

Margin cushion is the distance between you and a margin call.

In plain language:

Margin cushion = what you have – what the broker requires.

• Equity = total account value – margin loan

• Maintenance requirement = maintenance % × value of the margined asset (for GLD, we use 30%)

So:

Margin Cushion = Equity − Maintenance Requirement

If that number is big and positive, you’re safe.
If it’s zero, you’re on the call line.
If it’s negative, the margined asset alone can’t support the loan.

In the Bulletproof Margin framework, our goal is to keep this cushion multiple times larger than what the broker requires.

The $100,000 Example: Why This Setup Is Bulletproof

Assume an account structured like this:

• Total investments: $100,000

  • $40,000 in GLD (100% on margin)

  • $60,000 in other equities (paid in full with cash)

• Margin loan (L): $40,000

• GLD maintenance (m): 30%

Step 1 – Equity

Equity = Total value − Loan
= $100,000 − $40,000
= $60,000

Step 2 – Maintenance Requirement on GLD

Maintenance = 30% × GLD value
= 0.30 × $40,000
= $12,000

Step 3 – Margin Cushion

Margin cushion = Equity − Maintenance
= $60,000 − $12,000
= $48,000

You are $48,000 above what the broker requires. That’s a 5× buffer:

• Equity ÷ Maintenance = 60,000 ÷ 12,000 = 5×

Now stress-test it:

If GLD goes all the way to $0:

GLD value = $0

Total account value = $60,000 (your fully paid equities)

Equity = $60,000 − $40,000 loan = $20,000

Maintenance on GLD = 30% × $0 = $0

You still have $20,000 of equity and no maintenance requirement — even with gold at zero.
In other words, GLD alone cannot trigger a margin call in this structure.

That is Bulletproof Margin in action:
you borrow conservatively against a stable asset, keep a massive cushion, and let time and compounding do the heavy lifting.

Alejos Capital Group. Smart Money for Real People™.