Sandy Smith purchased 200 shares of Knight-Swift (KNX) from a broker at $60 per share. She deposits the money for the initial requirement. Knight-Swift makes an major announcement and its stock appreciates to $75. How much cash can the Sandy withdraw after this market move?

The Sandy Smith can withdraw cash equal to the excess equity. A purchase of 200 shares at $60 per share would require an initial deposit of $6,000 on a market value of $12,000. The investor would have $6,000 in equity a $6,000 debit. After a rise to $75 a share the KNX's market value would be $15,000. Laura's debit balance would remain unchanged at $6,000, but her equity would increase the $9,000 ($15,000 CMV - $6,000 DR). Reg T on $15,000 CMV is $7,500. Sandy's $9,000 equity less the $7,500 Reg T leaves her with $1,500 in excess equity.