| Margin Call |
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A
requirement by the Federal Reserve Board or a country's securities
commission demanding that a customer must deposit a specified amount
of money or securities when a purchase is made in a margin account.
This amount is a percentage of the market value of the security at
the time of purchase. This is sometimes referred to as a "fed
call".
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A
broker will make a margin call if one or more of the securities you
have bought with borrowed money(margin) has decreased in value. You
will be forced to either deposit more money in your account or sell
off some of your assets to recover a safe position.
As a general rule it is a good idea to never answer a margin call
and instead just sell off some of your assets to recover the position.
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Dictionary
