Margin call
A margin call is a demand from your broker to add cash or sell investments because your own stake in a margin account has fallen below the required minimum.
FINRA's minimum maintenance margin is 25% of the account's value; many brokers require more. If you don't act, the broker can sell your holdings for you.
Related terms
- Margin: Buying on margin means borrowing money from your broker to buy more stock than your cash alone allows, using your investments as collateral.
- Leverage: Leverage is using borrowed money to increase the size of an investment, which magnifies both gains and losses.
- Collateral: Collateral is an asset a borrower pledges to a lender, which the lender can take or sell if the loan isn't repaid.
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