Margin Call

Margin Call – A warning or demand from the broker that occurs when your account equity falls below a specified percentage of the used margin (the margin requirement). A margin call level is often around 100% of required margin (exact levels vary by broker; e.g., 100% margin level means equity equals used margin) or higher. When a margin call happens, it means your account is running out of usable funds due to trading losses. The broker may alert you to deposit more money or start closing positions. Formally, “a margin call is a broker’s demand that an investor deposit additional funds or securities to meet the minimum margin requirement”. If you do not or cannot add funds and the market keeps moving against your positions, the broker will proceed to liquidate open trades (see Stop Out). For automated systems, a margin call is effectively the last warning before forced closure – good risk management in your EA should prevent reaching this point (by using stop losses, limiting lot sizes, etc.).

⬅ Robots Glossary