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What is a Margin Call? - Knowledgebase / Trading / Basics of Trading - INFINOX Client Services

What is a Margin Call?

⚠️ What is a Margin Call?

A Margin Call occurs when your account equity falls below the required margin level needed to maintain open positions.

When this happens, you may be required to:

  • Deposit additional funds, or

  • Reduce or close open positions

If no action is taken, positions may be automatically closed to prevent further losses.




📊 Why does a Margin Call happen?

A margin call is typically triggered when:

  • The market moves against your open trades

  • Your equity decreases due to floating losses

  • Your margin level falls below the broker’s required threshold




📌 Key Formula

Margin Level = (Equity ÷ Used Margin) × 100%

When the margin level drops to a certain percentage, a margin call may be triggered.

If your margin level falls below 20%, your positions may begin to close automatically.



⚠️ This content is provided for informational purposes only and does not constitute investment advice. Trading with leverage involves risk.


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