Margin Call is a situation when a broker notifies a trader that the Margin Level has reached a certain, pre-specified, threshold. This threshold indicates that there might be a danger of needing to forcibly close some or all of trader’s positions.

With Margin Call, a broker simply alerts you that your margin level is below a specific number. At that point, you have a few options:

  • do nothing and accept the risk of potential involuntary liquidation (if the Margin Level drops further);

  • add more funds to your account and increase the equity and, hence, increase the Margin Level;

  • close some of the positions, accepting some losses, to free up some margin, i.e. diminish Used Margin.

Brokers usually set a few Margin Call levels to alert and to allow the trader to make adjustments well before the involuntary liquidation. At CEX.IO Broker, margin call and liquidation levels are initiated according to the following table:

Read more about the liquidation process in the article HERE.

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