What is Margin Call?
A notification from your exchange that your account equity has fallen too low to support your open positions — requiring you to add funds or face liquidation.
A margin call is the exchange warning you that your margin balance has dropped below the required minimum. If you don't act quickly — by depositing more funds or reducing your position — the exchange will automatically liquidate your positions.
The sequence of events:
1. You open a leveraged position using margin
2. The market moves against you
3. Your equity falls toward the maintenance margin level
4. Exchange sends a margin call notification
5. If equity falls further, position is liquidated automatically
Margin call vs. liquidation:
| Event | Trigger | Action Required |
|---|---|---|
| Margin call | Equity near maintenance margin | Add funds or reduce position |
| Liquidation | Equity at/below maintenance margin | Position auto-closed by exchange |
How to avoid margin calls:
Cross vs. isolated margin:
Most traders use isolated margin to contain risk per trade.