Glossary
Margin call
A broker's demand to add cash or securities, or sell holdings, when a margin account's equity falls below the required level.
On this page
A margin call is a demand from your broker to bring a margin account back up to the required level of equity, by depositing cash, depositing marginable securities, or selling holdings. It happens when falling prices shrink the value of the collateral while the loan stays the same. It is not a polite request: if the call is not met, or sometimes before you even hear about it, the broker can sell your positions to cover it.
Kinds of calls
- Maintenance (house) call: equity has fallen below the maintenance requirement, at least 25% under FINRA rules and often 30% or more under the firm's own rules.
- Regulation T (fed) call: a new purchase was not covered by enough initial margin, generally 50%.
- Exchange or special calls: tied to specific securities or concentrated positions.
How much it takes to fix one
What FINRA says about your rights
FINRA's investor guidance is blunt on four points: the firm can sell your securities without contacting you, it can choose which ones to sell, it can raise house requirements at any time, and you have no right to an extension. Forced sales often happen after sharp drops, which is why margin calls can lock in losses at the low.