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InvestHub.com's
Finance Dictionary and Glossary of Investment Terms

Margin Call  

Definition 1.

A demand that an investor using margin deposit additional money or securities to bring a margin account up to the minimum maintenance margin.
 

Definition 2.

A demand for additional funds because of adverse price movement. Maintenance margin requirement, security deposit maintenance.
 

Definition 3.

A call from a broker to a customer (called a maintenance margin call) or from a clearinghouse to a clearing member (called a variation margin call) demanding the deposit of cash or marginable securities to satisfy the Regulation T requirements and the house maintenance requirement for the purchase or short sale of securities or to cover an adverse price movement. also called federal margin call or Reg. T Call (for NASD requirements) or house call (for brokerage requirements).
 

Definition 4.

A somewhat dreaded call for additional capital to bolster the equity in an investor''s margin account. Say you''ve bought 100 shares of XYZ Corp. at $10 each, for a total of $1,000. You borrowed half of this from your broker. Now let''s say XYZ falls to $9. That means $900 in equity is available to cover a $500 debt, which sounds fine except the broker might require that lending not exceed 50%. Thus, you''re now $100 short of the minimum equity to maintain your margin position. If you can''t provide additional cash or securities, the broker will sell your XYZ shares.
 
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