Risk Management
Margin Call
A warning that equity has fallen below required margin levels.
Full Definition
A margin call occurs when your account equity falls below the broker's required margin maintenance level. It's a warning that you're at risk of having positions forcibly closed. Different brokers have different margin call levels, typically between 50-100% margin level. To avoid margin calls, use proper position sizing and stop losses.
Example
If your broker has a 100% margin call level and you have $1,000 required margin, a margin call triggers when your equity drops to $1,000. If equity continues to fall to the stop-out level (e.g., 50%), positions are automatically closed.
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