Margin Call A margin call or the appeal occurs when an investor is forced to increase the cash in their account or close a portion of their portfolio. It is important to understand that margin trading can cause an investor to face what is known as a margin call, where the contract is automatically closed when the margin falls below a minimum threshold.
Closing The trader is informed in advance that his margin is almost exhausted and that his position may be automatically closed in the near future. A margin call rarely occurs, or precisely when the account balance is insufficient to cover the losses caused by the price difference. This is usually due to a sharp drop in price during the trading day.
Risk Buying on margin is a popular investment strategy, especially for more experienced traders. However, this strategy is one of the very risky ones and you can lose all your invested money.
