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What is a margin call?

Posted By Robert On Thursday, February 12th, 2015 With 0 Comments

A margin call is a call or email that a client may receive from a broker to inform them that they do not have sufficient funds in their account to cover the margin requirements on their open positions.

What can I do if I do not have sufficient funds in my account to cover my margin requirements?

You have 3 options:

  1. Deposit additional funds into your account to cover the margin requirements on your open positions.
  2. Close some positions on your account to release some funds.
  3. Reduce the size of the stake on your open positions which will in turn reduce the total margin required.

Will I be notified by the provider if my account balance is insufficient to support my open positions?

Although the brokerage trading team endeavour to contact clients when their account balance is not sufficient to cover their positions, this is not always possible. Clients must monitor their own trading accounts and take the necessary steps required to manage their balance accordingly. When possible, clients may receive a ‘Margin Call’ from the trading desk to inform them that they need to deposit additional funds in order to maintain their open positions.

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