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When your broker demands more money because your borrowed investments lost value.
Why It Matters
A margin call is the nightmare scenario for leveraged investors. Your broker will sell your positions - often at the worst possible time - if you can't deposit more cash. During the 2020 crash, margin calls forced many investors to sell at the bottom.
Key Points
- Triggered when account equity falls below maintenance margin (usually 25-30%)
- You typically have 2-5 days to deposit funds or the broker liquidates your holdings
- Brokers can sell ANY of your positions to meet the call - you don't always get to choose
Related Terms
Common Questions
When your broker demands more money because your borrowed investments lost value. A margin call is the nightmare scenario for leveraged investors. Your broker will sell your positions - often at the worst possible time - if you can't deposit more cash.
A margin call is the nightmare scenario for leveraged investors. Your broker will sell your positions - often at the worst possible time - if you can't deposit more cash. During the 2020 crash, margin calls forced many investors to sell at the bottom.
Triggered when account equity falls below maintenance margin (usually 25-30%)
You typically have 2-5 days to deposit funds or the broker liquidates your holdings
Brokers can sell ANY of your positions to meet the call - you don't always get to choose