What triggers a margin call in trading?
In trading, a margin call occurs when an investor's margin account falls below a certain required amount. This typically happens when the value of the assets in the account decreases and the account no longer has sufficient collateral to support the leverage being used. Margin calls can also be triggered by certain broker requirements, such as a maintenance margin, which requires a certain amount of funds to be maintained in the account at all times. When a margin call is triggered, the investor may be required to deposit additional funds into their account or close out some of their positions to meet the margin requirements. Failing to meet a margin call can result in the liquidation of an investor's assets.
Feb 15, 2023 23:03