METATrading Academy

Risk management

Margin callbroker ka paisa bharne ka notice

A demand from your broker to add funds when losses have reduced your margin below the required level, failing which positions are squared off.

A margin call is what happens when a leveraged position has lost enough that the money in your account no longer covers the exchange's margin requirement. The broker asks you to add funds by a deadline, and if you do not, it closes some or all of your positions at the market price, whatever that is. Suppose you hold an SBI futures lot with ₹1,00,000 margin and the stock falls sharply, producing a ₹40,000 mark-to-market loss overnight. If the required margin is still ₹1,00,000, you must deposit ₹40,000 or be squared off, often at a poor price near the open. Margin calls tend to arrive in the worst conditions, when everyone else is also being forced to sell. They are a direct consequence of position sizing that was too large for the volatility. Trade small enough that a bad day does not trigger one.

Lessons that use this term

Video
Risk7 min read

Leverage and spread, in plain language

Leverage makes a position bigger than your cash. The spread is the gap between the buy and sell price. One multiplies your results, the other quietly charges you on every trade.