USA HISTORY

Detailed explanation-1: -Margin calls are demands for additional capital or securities to bring a margin account up to the maintenance requirement. Brokers may force a trader to sell assets, regardless of the market price, to meet the margin call if the trader doesn’t deposit funds.

Detailed explanation-2: -A call for additional margin would be immediately triggered: a federal (or initial) margin call. XYZ is trading for $100/share, so the investor purchases 200 shares. The account only has $9, 000 of equity, so the investor will receive a federal margin call for $1, 000.

Detailed explanation-3: -A margin call is a demand from your brokerage firm to increase the amount of equity in your account. You can do this by depositing cash or marginable securities to your account or by liquidating existing positions to generate cash.

Detailed explanation-4: -Many margin investors are familiar with the “routine” margin call, where the broker asks for additional funds when the equity in the customer’s account declines below certain required levels. Normally, the broker will allow from two to five days to meet the call.