Margin Call Law and Legal Definition
Margin Call is a demand upon an investor to put up money or securities with the broker so that the margin account is brought up to the minimum maintenance margin. Buying on margin involves taking out a partial loan from one's broker in order to cover a larger investment than one's capital could directly cover. The call is made when a investor’s account declines below a minimum standard set by the exchange or by the firm. Once broker put out a margin call, the investor will be forced to raise an additional amount to meet the margin call by selling off a portion of the stock invested in or by taking out an additional loan from another source, or by replenishing the equity pool with investor's own assets.
