Investor Glossary-margin callInvestor Glossary-margin callInvestor Glossary-margin callInvestor Glossary-margin callInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Margin Call

The HTML to link to this page
 

A margin call is the demand by a brokerage that an investor contribute additional cash to a margin account. The margin call may mandated by Federal Reserve rules, such as Regulation T, although the NASD, the exchange, or even an individual brokerage may have tighter margin requirements that could trigger a margin call sooner. The margin call takes place when securities purchased on margin, decline below a certain amount, so the account no longer meets the maintenance margin. The investor will generally receive a margin call by phone. In the event a margin call cannot be met, the brokerage will sell securities held in account until margin requirement is met. Failure to meet a margin call can therefore result in a considerable loss. The margin requirement to initiate a trade on margin, called the initial margin, is higher than the maintenance margin so that small fluctuations in price do not typically trigger a margin call soon afterwards. A margin call can often be satisfied with marginable securities in lieu of cash.



Rate this margin call definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: irrevocable trust, minority interest, Zero Cost Collar, 144a, open position, EBITDA, 1035 exchange, annual return, FICO score, phantom income, in escrow, diluted share, deferred revenue, real GDP, deferred tax, current ratio, FTSE, 1031 exchange, dividends payable, margin rate, stock market close, limit order, VIX, retained earnings, per diem, debt service coverage, class C shares, stock split, average price per share, ex-dividend, command economy, ex-dividend date, reverse mortgage, liquidity ratio, option premium, risk management, quality assurance, 401a, required rate of return, cancelled check, implied volatility, covered put, LIBOR, Key Rate Duration, labor relations, wholly-owned subsidiary, APR, balance sheet, inflation


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use