margin call is a phone call that you will receive from a broker if your account falls below a certain balance when trading with margin. Here are the basics of the margin call.

Trading with Margin

In order to receive a margin call, you are going to have to be trading with margin. In the stock market, you can often trade with margin that is provided by your broker. This means that you are essentially borrowing money from the broker in order to increase your position in the market. This is designed to increase your returns overall. To trade with margin, you will have to meet certain credit requirements and open a special type of account in most cases. You will commonly trade with margin in the forex (foreign exchange) market.

Margin Call

To trade with margin, you are going to have to keep a certain amount of money in your account. The minimum amount is going to differ from broker to broker. If you are in the middle of a trade and your account balance falls below a certain amount, the broker is going to utilize a margin call. The broker will call to tell you to deposit more money immediately and that, if you do not, he or she will close out positions in your account.

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