Margin Call

A margin call is the demand by a brokerage that an investor contributes additional cash to a margin account. The margin call takes place when securities purchased on margin decline below a certain amount and the account no longer meets the maintenance margin. The investor will generally receive a margin call by phone. In the event a margin call cannot be met, the brokerage will sell securities held in the account until margin requirement is met. Failure to meet a margin call can therefore result in considerable loss. A margin call can often be satisfied with marginable securities in lieu of cash.

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