Margin Call

A margin call occurs when a trader's account equity falls below the broker's required minimum margin level, triggering a warning or automatic closure of open positions to prevent further losses. Unlike margin itself — which is the initial deposit required to open a position — a margin call signals that the account can no longer sustain its open trades. Brokers may close positions automatically at the stop-out level, locking in losses. Avoiding margin calls requires disciplined position sizing, consistent use of stop-loss orders, and maintaining adequate free margin in the account at all times.