margin call

A **margin call** is a demand from a broker to an investor to deposit additional funds or securities into their margin account when the account’s equity falls below the required minimum maintenance level. This typically happens when the value of the investor’s holdings declines, reducing their collateral and increasing the broker’s risk. If the investor fails to meet the margin call, the broker may sell some or all of the securities in the account to cover the shortfall. Margin calls are a key concept in leveraged investing and risk management.