GLOSSARY
Margin call
The warning that arrives before the broker starts closing your trades for you.
Updated 2026-09-05 · Educational content · No broker owns this site
Quick answer. A margin call is a broker's warning that your equity has fallen too low to support your open positions, asking you to add funds or reduce size. It is a warning, not a protection: if losses continue, the broker closes the positions itself in a stop-out.
The name is a leftover from the telephone era, when a broker literally called. Today it is a notification, an email or a colour change on the platform. What it means has not changed: your equity has dropped close to the margin your open trades require, and the broker wants that gap restored.
What happens during a margin call?
You have three responses, and only three. Deposit more money, which raises equity. Close or reduce positions, which releases used margin. Or do nothing, in which case the market decides — and if the account keeps falling the broker closes positions at the stop-out level.
At what level does a margin call happen?
There is no single regulated margin-call level, and this is the detail most explanations skip. Each broker sets its own warning threshold — often at a margin level of 100%, sometimes 80% — and publishes it in the account terms rather than in the rulebook.
What is regulated is the close-out that follows. ESMA's 2018 measures, made permanent for the UK by FCA PS19/18, require a provider to close retail positions once account funds plus unrealised profits fall to half the initial margin. In the US, NFA rules oblige a forex dealer to collect additional security deposits or liquidate a customer's positions when deposits are insufficient. So the warning is a courtesy; the liquidation is the rule.
What do beginners get wrong about margin calls?
Two mistakes, and they compound. The first is treating the call as a safety net — a sign the broker is looking after you. It is a notification that the account is already in trouble.
The second is answering it with a deposit. Adding funds raises the margin level and buys time, but it does not improve the trade; it enlarges the amount at stake in a position that is already losing. Reducing size fixes the arithmetic. Depositing only resets the countdown, and does it with more of your money on the table.
The reliable way to never meet a margin call is upstream: size positions from a fixed risk per trade, so that a normal losing streak never brings equity near the margin requirement.
Related terms
- Leverage · Margin · Equity
- Free margin · Margin level
- Margin call · Stop-out level
- Lot · Pip — the two numbers that decide how fast the margin picture moves
Frequently asked questions
Can I ignore a margin call?
You can, but the broker will not. If the account keeps falling, positions are closed automatically at the stop-out level — in the EU and UK, when equity reaches 50% of the initial margin required.
Will I owe money if the account goes negative?
In the EU and UK, negative balance protection limits a retail client's liability to the funds in that trading account. Outside those rules it depends on the broker's terms, so check them before depositing.
Does a margin call close my trades?
No. The margin call is only the warning. The automatic closing is a separate event called the stop-out, and it happens at a lower margin level.
Sources
- ESMA — Additional information on the agreed product intervention measures (27 March 2018)
- FCA PS19/18 — Restricting contract for difference products sold to retail clients (2019)
- NFA Financial Requirements Section 12 — Security deposits for forex transactions (amended 18 March 2026)
- FirstPip knowledge base — concepts/leverage-and-margin (sources S007, S010, S011, S013)