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 existence of a centralized location from which to track and manage margin calls helps avoid costly and time-consuming errors while also helping to achieve straight-through processing.
Most firms will attempt to notify their customers of margin calls, but they are not required to do so.
8 billion in margin calls since December 31, 2007, and had satisfied $1.
The company intends to use a portion of those proceeds to pay reduced but currently unmet margin calls on reverse repurchase agreements and to auction swap providers of $530 million plus deficiency claims of $28.
Negotiations deteriorated late on March 12 when, among other things, the pricing service utilized by certain lenders reported a drop in the value of the RMBS collateral that is expected to result in additional margin calls tomorrow of approximately $97.
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.
Merrill Lynch") which allows MuniMae to meet future margin calls without posting additional cash as collateral.
The market turmoil from the last week means that many investors who were trading with margin accounts likely had significant portions of their account liquidated to cover margin calls.
Margin calls occur when your account value falls to a value calculated by the broker.
Every time the stock market goes down, you have more margin calls so there's a domino effect.
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.
Now, many UBS clients have been forced to liquidate hundreds of millions of dollars in holdings in these funds after incurring margin calls.