Margin call
A margin call is a broker's warning that your account barely has enough funds to keep open positions. You need to add money or close some trades.
How it works
It is measured by the margin level: account equity (balance plus the current profit or loss of open trades) divided by used margin, times 100%. The broker sets the margin call threshold, often 100%. Below it you usually cannot open new trades.
If the loss keeps growing, a stop out follows: at many brokers it sits near 50%, and for retail clients in the EU that is the required minimum. Positions are then closed automatically, usually starting with the biggest loser, until the margin level is back above the threshold.
On crypto exchanges the term margin call is less common: you get a risk warning and then liquidation. The idea is the same: there is too little collateral, and the position is about to be closed without you.
You have $5,000. You open 1 lot of USD/JPY with 3% margin: $3,000 is used and $2,000 is free. A $2,000 loss leaves $3,000 of equity against $3,000 of margin, the level hits 100%, and a margin call is very likely.
The loss on the same trade grows to $3,500. Equity of $1,500 against $3,000 of margin is a 50% level. If the broker's stop out is 50%, the position is closed and about $1,500 is left in the account.
Do not wait for the notice. Keep a cushion of free margin and cut the position early, while the level is far from 100%. Do not try to "save" a trade by adding money to a losing position: it often just makes the final loss bigger. A stop-loss and a smaller lot from the start work better.
Questions and answers
What is a margin call in simple terms?
It is a warning from your broker that there is almost no money left in the account to keep your trades open. If you do nothing and the loss grows, positions get closed for you.
What is the difference between a margin call and a stop out?
A margin call is a warning and your positions stay open. A stop out is the forced closing of trades when the margin level falls to the next threshold.
What should you do on a margin call?
Close or reduce some positions to free up margin, or add funds. Add money only if you still trust the trade and it is protected by a stop-loss.
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Updated: 2026-10-19