Margin Call


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Margin Call

A demand by a Broker that an investor who has purchased Securities using credit extended by the broker (on margin) pay additional cash into his or her brokerage account to reduce the amount of debt owed.

A broker makes a margin call when the stocks in the account of the client have fallen below a particular percentage of their market price at the time of purchase, thereby increasing the outstanding debt and the broker's liability should the client become unable to pay. This process is also known as remargining.

A broker might also make a margin call when a client desires to make additional purchases of stock and securities.

References in periodicals archive ?
The new service automates collateral communications with counterparties and provides secure electronic management of margin calls, substitutions, and interest statement processing.
NO SEC FIVE DOLLAR RULE : An important allegation in the FINRA Claim is Goldman contrived a margin call based on a mythical "SEC Five Dollar Rule.
Margin calls and a low initial margin worsened the stock market crash of 1929.
MarginSphere is a central messaging service that provides electronic exchange of margin calls, substitutions and interest statements between counterparties engaged in collateral management helping to reduce inefficiencies and manage risk in an automated fashion.
Acting on behalf of Goldman, [Bradley] DeFoor [the account executive] justified the margin call with a lie, telling Dai and Sutardja there was an SEC rule that DeFoor called the "SEC Five Dollar Rule.
A specific risk that is discussed in the Alert is the fact that some investors mistakenly believe that a firm must contact them first for a margin call to be valid, which is not the case.
2, the Bankruptcy Court entered a temporary restraining order suspending the effectiveness of the margin call provisions until the court has an opportunity to hear Triton's motion seeking a preliminary injunction.
If you or someone you know believes their account at Interactive Brokers suffered losses as a result of a wrongful liquidation or margin call, contact the law firm of Shepherd, Smith, Edwards & Kantas LLP for an evaluation of the account to determine if there might be a claim to attempt to recover some or all of the losses.
Dubai: A margin call is when a broker demands an investor deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin.
A margin call is a demand by a broker that an investor deposits more cash to cover potential losses on trades.