What happens at a margin call?

A margin call occurs when the equity in a trading account falls below the required maintenance margin. This situation typically arises when the market moves against a trader's open positions, reducing the account's equity. When a margin call is triggered, the broker will request that the trader deposit additional funds or close some positions to bring the account back up to the required margin level. Failure to meet the margin call can result in the broker liquidating positions to cover the shortfall. It is essential for traders to monitor their margin levels actively, as margin calls can lead to significant losses if not addressed promptly.