Margin call

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Definition

A margin call occurs when a trader is asked to add capital to a brokerage account that is on margin. The shortage can be added in either cash or securities until the margin requirement for the account is met.

If the initial margin or minimal margin requirements are not met, the account may be liquidated by the brokerage.

Bibliography

Dictionary of Finance and Investment Terms, Barron's Financial Guides, 2003.

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