A margin call is a broker’s demand for additional funds when a trading account’s equity falls below the required maintenance margin level. Margin calls require immediate action: depositing additional funds, closing positions, or accepting automatic liquidation by the broker. These calls protect both traders and brokers from excessive losses in leveraged trading accounts.

Margin calls often occur during volatile market periods when rapid price movements create large unrealized losses. Traders can avoid margin calls by maintaining adequate account equity, using appropriate position sizing, and implementing stop-loss orders. Understanding margin call procedures and maintaining capital reserves helps prevent forced liquidations at unfavorable prices.

Real-world example: A trader’s account equity drops from $50,000 to $35,000 due to adverse EUR/USD movements, triggering a margin call requiring $10,000 additional deposit within 24 hours or automatic position closure to meet maintenance requirements.