| Pay cash for 100 shares of a $50 stock | $5,000 |
| Buy another 100 shares on margin | +$5,000 |
| Total value | $10,000 |
| Stock falls to $30 | –$4,000 |
| Total value when shares are sold | $6,000 |
| Repay margin loan | –$5,000 |
| Pay margin interest | –$400 |
| Subtract initial cash investment | –$5,000 |
| Loss | $4,400 |