Margin Call

In trading, a margin call denotes a request by a stock broker to an investor instructing them to replenish their margin.

A margin is a line of credit provided by a broker and collateralized by the cash in your brokerage account and the securities in your custodial account. This line of credit can be used for trading on margin.

A margin call occurs when the collateral value of your securities no longer meets loan-to-value ratio requirements.

If you cannot replenish your margin within a given time frame after a margin call, the broker retains the right to close your investment positions and/or to sell your securities to balance your margin.

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Expert Benjamin Manz
Benjamin Manz is an expert on banking and financial topics at moneyland.ch.