Stock Market Glossary
Margin call
Request from the broker to provide additional collateral.
In brief: Request from the broker to provide additional collateral.
Meaning in practice
For leveraged positions, the broker sends a margin call as soon as the account falls below the minimum margin. If additional shots are not taken, there is a risk of forced liquidation – one of the most common triggers for sudden total losses.
Context for investors and traders
For traders, this term is most useful when preparing and executing an order. Its meaning depends on the venue, liquidity, time frame and order type. A single reading is not a reliable buy or sell decision.
How to use this in practice
Use the term first to describe the situation and add verifiable data: time frame, benchmark, costs and liquidity. Only then does it become an assessment that can be connected to an investment objective and risk budget.
What to keep in mind
Avoid false precision. Many market terms describe probabilities or historical patterns; they neither guarantee a return nor replace the review of a specific security.
