Margin Call: To protect the margin loans they make, brokers issue a margin call if your equity in your margin account falls below the required maintenance level of at least 25%. If you get a margin call, you must deposit additional cash or securities to meet the call, bringing the balance of the account back up to the required level. If you don’t meet the call, securities in your account may be sold, and your broker repaid in full. For example, if you buy 1,000 shares on margin when they are seliing at $10 a share, and the price falls to $7 a share, your equity would be $2,000 ($7,000 market value minus $5,000 loan is $2,000). That's 28.6% of the market value. If your brokerage firm has a maintenance requirement of 30%, you would receive a margin call to bring your equity back to the required level — in this case $2,100, which is 30% of $7,000. You might also get a margin call if you trade futures contracts and the value of your account drops below the required maintenance level. However, margin requirements for futures are different than for stock.

 

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Margin Call: To protect the margin loans they make, brokers issue a margin call if your equity in your margin account falls below the required maintenance level of at least 25%. If you get a margin call, . . . View Full Definition

Margin: Margin is the minimum amount of collateral — in either cash or securities — you must have in your margin account to buy on margin, sell short, or invest in certain derivatives. The initial m . . . View Full Definition

Remargining: Putting up additional cash or securities after a margin call on a brokerage customer's margin account so that it meets minimum maintenance requirements.

Maintenance Margin Requirement: A sum, usually smaller than but part of the original margin, that must be maintained on deposit at all times. If a customer's equity in any futures position drops to or below, the maintenanc . . . View Full Definition