Exhaust Price

Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority and you can order it here)                  

First read MARGIN

One who carries securities on margin has only an equity or partial interest in the securities he is carrying.  In case of a fall in prices which threatens to wipe out the owner’s equity or margin, the exhaust price is approached.  In other words, the exhaust price is the price at which these securities would have to be sold entirely to obliterate the margin, or the price at which the broker would have to sell in order to protect himself from loss.  Brokers compel their customers to furnish additional margin before the exhaust price is reached, or to enter a STOP LOSS ORDER which may be placed several points above the exhaust price.

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