Margin call

A margin call occurs when an investor's account falls below the required minimum value set by a brokerage, often due to losses on borrowed funds used to buy securities. When this happens, the broker requests the investor to deposit more money or sell some assets to bring the account back to the minimum threshold. If the investor fails to meet the margin call, the broker has the right to sell assets without prior approval to cover the shortfall. Essentially, it’s a warning that the investment position is risky, and immediate action is needed to avoid further losses or forced liquidation.