Margin call

A margin call happens when losses on open positions have reduced your account equity to a level the broker considers dangerously close to the margin it requires. Historically a broker would literally call to ask for more money. Today it is usually an automated alert on the platform, by email or by push notification, triggered when your margin level drops below a set threshold, commonly 100%, though each broker sets its own.

A margin call is a warning, not an action. If the account keeps losing, the next step is the margin close-out (often called stop-out), where the broker starts closing positions for you. For EU and UK retail clients this must happen no lower than 50% margin level.

Example

Illustrative figures: your account has 5,000 euros and you open trades needing 2,500 euros of margin. Your margin level is 200%. The trades lose 2,500 euros, so equity is 2,500 euros and margin level is 100%. If the broker's margin call level is 100%, you get the warning now. If losses reach 3,750 euros, equity is 1,250 euros, margin level is 50%, and the broker will start closing positions.

What a margin call really tells you

The honest reading is that the position is too large for the account, or that the trade has gone well past where it should have been closed. Depositing more money to avoid the close-out keeps the trade open but increases what you can lose. Sizing positions so a stop-loss is hit long before margin becomes a problem is the usual way to avoid margin calls altogether. Our guide to margin calls and stop-outs walks through the full sequence.