Margin call

Margin call

The broker may at any time revise the value of the collateral securities (margin) after the estimation of the risk, based, for example, on market factors. If this results in the market value of the collateral securities for a margin account falling below the revised margin, the broker or exchange immediately issues a margin call, requiring the investor to bring the margin account back into line. To do so, the investor must either pay funds (the call) into the margin account, provide additional collateral, or dispose of some of the securities. If the investor fails to bring the account back into line, the broker can sell the investor's collateral securities to bring the account back into line.