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 ?
In the High Court, a judge ruled that Deutsche Bank was not in breach of contract and that Sebastian Holdings would have to pay the financial [pounds sterling]146m (E174m, $235m) in compensation for unpaid margin calls from 2008 to the group.
Margin Calls, Credit Downgrades and a Run on the Bank
one of the major problems of selling options is the position can deteriorate very rapidly and margin calls can come thick and fast.
The financers, including non- banking finance companies ( NBFCs) and stock brokers who arrange funds for promoters, offloaded huge volume of pledged stocks due to a margin call sending share prices down, market analysts said.
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Given the subject matter, Margin Call could easily have become a dull tale of financial jargon.
"Margin Call' is not a history or economics lesson.
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'Given the growth and complexity of the derivatives collateral management process, it is imperative we provide clients with a clear, real-time window into reviewing and approving their collateral agreements, margin calls and settlements.
"Margin Call" is one of 16 international contenders vying for the Golden Bear, which a jury led by Italian-American actress and director Isabella Rossellini will present on February 19.
The equity of banks is like the collateral in a margin call. What we need to do is to devise a system that makes this margin call timely.