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Margin call definition
A margin call is a broker's demand that you add funds or reduce exposure once your account equity falls below the required margin level. It warns that your open positions may face forced closure.
A margin call fires when a leveraged position moves against you and your equity drops under the maintenance margin the broker sets. To clear it, you deposit more funds, close some positions, or cut your position size until the required level is restored.
A margin call is a warning, not the closure itself. If you do not act, the broker may close positions automatically, and that forced exit is liquidation. The exposure is larger than it looks, because losses run on the full position size, not only on the margin you posted.
Margin call Example
You deposit USD 1,000 and open a leveraged position that needs USD 500 in margin.
The market moves against you, and your equity falls close to the broker's maintenance margin requirement.
The broker issues a margin call, asking you to add funds or reduce exposure. If you do not act, the broker may close the position for you.
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