Definition of Margin call:
A margin call is usually an indicator that one or more of the securities held in the margin account has decreased in value. When a margin call occurs, the investor must choose to either deposit more money in the account or sell some of the assets held in their account. .
A demand by a broker that an investor deposit further cash or securities to cover possible losses.
A margin call occurs when the value of an investor's margin account falls below the broker's required amount. An investor's margin account contains securities bought with borrowed money (typically a combination of the investor's own money and money borrowed from the investor's broker). A margin call refers specifically to a broker's demand that an investor deposit additional money or securities into the account so that it is brought up to the minimum value, known as the maintenance margin.
Demand from a broker to a customer, or from a futures clearing house to a clearing member, to bring up the margin deposit (depleted by a fall in the price of the security purchased on margin) to the required minimum level. Also called maintenance call.
How to use Margin call in a sentence?
- Brokers may force traders to sell assets, regardless of the market price, to meet the margin call if the trader doesn't deposit funds.
- A margin call occurs when a margin account runs low on funds, usually because of a losing trade.
- Margin calls are demands for additional capital or securities to bring a margin account up to the minimum maintenance margin.
- If youre determined to invest on margin, set aside some money to cover a margin call, she says.
Meaning of Margin call & Margin call Definition