Margin call

A margin call is the demand, in a margin account, for additional funds, additional money or securities, to be deposited into the account. The margin call arises because of an adverse price movement in one or more of the securities held in the account. The margin call requires the account owner to bring the account value up to the minimum acceptable amount called the maintenance margin. Because the securities held in a margin account are acquired partially with borrowed money, the broker has the right to demand that the account owner maintain this minimum balance in an account. Margin calls occur on long positions when the value of held securities falls, and on short positions when the value of held securities rises.

In futures, a margin call is a demand by a broker for additional funds, additional money or securities, because of an adverse price movement in one or more of your held securities to bring a margin account up to the minimum maintenance margin.

A broker will make a "margin call," if the price of one or more of the securities you have bought, moves adversely (usually droping, but rising if shorting) past a certain point. You would be forced either to deposit more money, or sell off some of your assets to reduce your liability to match your unused good faith deposit (margin).

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Margin call