Margin calls are a necessary evil in the world of investing. When an investor’s margin balance dips below a certain point, the brokerage will issue a margin call to let them know they need to deposit more money into their account or sell some stocks to cover their losses. Without this, then the brokerage may force liquidation of some securities. What is A Margin Call? A margin call is when an investor’s account falls below the maintenance requirement set by their broker. The latter happens if they have purchased securities on credit and are required to keep a certain amount of value in their brokerage accounts so that they can…
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