INSIGHTSA margin call occurs when a trader's account balance falls below the required minimum margin level. This situation typically arises when the market moves against the trader's position, leading to losses that reduce the equity in the account. In such cases, brokers may issue a margin call, requiring the trader to deposit additional funds or sell assets to restore the account to the required margin level.
If the trader fails to respond to the margin call, the broker may take corrective actions, which can include liquidating positions to cover the shortfall. Therefore, understanding margin requirements and actively managing positions is crucial for traders to avoid margin calls.