You’re One Bad Day Away From a Margin Call (Are You Sure?)

Hi friends,

This issue is a playbook, not a story.

If you hold tech (TSLA, QQQ, XLK) or leveraged ETFs (TSLL, TQQQ), use this as your quick margin audit.

🧩 Playbook Goal

Objective:
Know if your margin is safe, stretched, or dangerous — and what that means.

Step 1 – Get Your Inputs

Open your brokerage app and find:

1. Account Value

   • Sometimes called Net Liq / Equity / Account Value

   • Example: $80,000

2. Margin Debt

   • Negative cash / margin debit

   • Example: 8,000 (your broker might show –$8,000)

These two numbers are all you need.

Step 2 – Calculate Margin %

Use the simple formula:

Margin % = Margin Debt ÷ Account Value

Using the example:

• Margin Debt: $8,000

• Account Value: $80,000

👉 $8,000 ÷ $80,000 = 0.10 → 10% margin

You now know your Margin %.
Next, match it to a zone.

Step 3 – Match Your Zone

🟢 Green Zone: 0–10–15%

Definition:
Margin % ≤ 15%

What it means:

• Margin is a tool, not a threat

• Likely backing:

  • Core tech (TSLA, QQQ, XLK, etc.)

  • Covered calls or defined-risk spreads

Action:

• Ok to hold

• Avoid ramping up leverage just because you “have room”

🟡 Yellow Zone: 15–20%

Definition:
15% < Margin % ≤ 20%

What it means:

• You’re stretched

• A bad move in tech could hurt more than you expect

Allowed in our framework only if:

• Market is meaningfully down (real dip, not –1% noise)

• Margin is used to buy unleveraged tech (e.g., QQQ, TSLA shares)

• You have a 12–24 month plan to pay it down:

  • External income

  • Dividends

  • Options premium

Action:

• If you have no clear repayment plan → treat this as a warning

• Stop adding new risk until the plan is defined

🔴 Red Line: 25%+

Definition:
Margin % ≥ 25%

Our internal rule at ACG:

We don’t let Margin % cross 25%.

What it means:

• Small drops can trigger big equity swings

• Maintenance requirements can jump

• Margin calls become realistic

Action (ACG-style):

1. Stop buying.

2. Trim risk, starting with:

   • Leveraged ETFs (TSLL, TQQQ, etc.)

3. Bring Margin % back below 20%, then aim the long-term target under ~15%.

We always prefer missing upside over getting liquidated at the bottom.

Step 4 – Apply It to Your Portfolio

Use this checklist:

• ✅ I know my Account Value

• ✅ I know my Margin Debt

• ✅ I calculated Margin %

• ✅ I know which zone I’m in:

  • 🟢 Green (≤15%)

  • 🟡 Yellow (15–20%)

  • 🔴 Red (25%+)

Then write one line for yourself:

“My Margin % is ~X%. I am in the ___ Zone. My next move is ___.”

That single sentence is the heart of your personal margin playbook.

If you want, hit reply and tell us:

• Your rough Margin %

• Which zone you’re in

• What you think your “next move” should be

We can’t give personalized advice, but we do read every reply and we’re building this playbook series around real questions like yours.

Talk soon,
Alejos Capital Group
Smart Money for Real People

Disclaimer: Educational only, not personal investment advice. Margin and leveraged products can significantly increase risk, including losses beyond your initial investment.