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  • 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.

What is a Margin Call?
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Investago | What is a Margin Call?
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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.97% of retail investor's accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.