margin call

margin call definition - finance
A demand made of a customer of a stock brokerage or futures commission merchant firm to add more money into his or her account. Margin calls are made in order to bring investorsÂ’ accounts up to a minimum level. This happens when the price of a stock, futures contract, or other security declines after it has been purchased on margin. In the futures market, a clearinghouse also may make a call asking the member to increase the amount of money on deposit.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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