Margin Call

A margin call is a warning from your broker that your account equity has fallen dangerously close to the minimum required to maintain your open positions. It means your trades have moved against you enough that your remaining equity is at risk of being entirely consumed by losses.

Different brokers handle margin calls differently. Some send you a notification giving you time to either deposit more funds or close some positions. Others have an automatic stop-out mechanism that starts closing your largest losing positions once your margin level hits a threshold — no warning, just automatic liquidation.

Reaching a margin call should never happen if you're managing risk properly. It means either your position was too large for your account, you didn't use stop losses, or you let multiple losing trades accumulate without cutting losses. Every experienced trader has probably been margin called at least once early in their career. The lesson: position sizing and stop losses exist for a reason.