WHAT IS Margin Call?

A Margin Call occurs when a trader's account equity falls below the required maintenance margin level. It is a broker's demand to deposit additional funds or close positions to bring the margin level back to acceptable limits.

Let’s walk through a typical scenario.

⚠️ Scenario

Account Balance: $1,000
Used Margin: $800
Maintenance Margin Requirement: 50% → $400
If your equity drops below $400 due to losses in open positions, a margin call will be triggered.
You must either deposit more funds or your broker may automatically close some or all of your positions to cover the risk.

🧠 Tip

To avoid margin calls:

Use appropriate leverage (don’t overextend)
Monitor your equity frequently
Always keep a buffer above the maintenance level

Many beginner traders face margin calls because they don’t understand how margin requirements work. Awareness and discipline are key.