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A margin call means your account no longer has enough equity to support the broker’s loan under the applicable maintenance requirement. The brokerage can demand cash or securities, and it may sell positions or other assets—possibly without contacting you first. If the sale does not repay the loan and expenses, you remain responsible for the shortfall, so losses can exceed your original deposit.
What a margin call means
In a margin account, the brokerage lends part of the money used to buy securities. Your positions serve as collateral for that loan. Account equity is the value of the securities and cash attributable to you after accounting for the outstanding loan. When market values fall, your equity can shrink even though the loan balance has not fallen with it.
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A margin call is the firm’s demand that you restore the account to the required equity level. The requirement may come from a baseline regulatory rule, the brokerage’s higher “house” requirement, or both. Your margin agreement and the firm’s current policies determine the exact calculation, deadline and acceptable methods of payment.
What triggers the call
A decline in the pledged securities
The most familiar trigger is a falling stock price. A lower market value means less collateral backs the same loan. If equity drops below the maintenance level, the firm can issue a call or begin selling assets to correct the deficiency.
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A higher house requirement
Brokerages can set maintenance requirements above a regulatory baseline. They can also raise those house requirements without advance notice, according to FINRA’s investor margin disclosure. A call can therefore occur even when the stock has not made a dramatic move if the firm changes the requirement applied to your position.
Other account changes
Corporate actions, concentrated positions, withdrawals, transfers or changes in a security’s eligibility can alter the collateral calculation. The relevant question is not simply whether the stock price fell; it is whether the account still meets the requirement the firm is applying at that moment.
What the brokerage may do
Demand additional collateral
The firm can ask you to deposit cash or eligible securities. It may specify an amount and a deadline, and it may restrict transactions while the deficiency remains.
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Liquidate positions
If the account remains deficient—or if the firm’s agreement permits immediate action—the brokerage may sell securities or other assets. FINRA warns that a firm may liquidate without contacting the customer first. A courtesy telephone call, app notification or stated deadline is not a guaranteed grace period.
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Choose what gets sold
You may not control which holdings are liquidated. The firm can select securities or other assets to protect its interests. It could sell a position you intended to keep rather than the one you would have chosen to sell yourself.
Pursue any remaining balance
Liquidation does not erase the loan automatically. If the sale proceeds are insufficient to cover the loan and the amount owed under the account agreement, the remaining deficiency is still your responsibility. FINRA’s margin disclosure states plainly: “You can lose more funds than you deposit in the margin account.”
How the account moves from a falling price to a deficiency
- You borrow against securities. The brokerage records a loan balance, while your purchased securities become collateral.
- The market value changes. A decline reduces the collateral value and, consequently, your equity.
- The firm compares equity with its requirement. The calculation uses the firm’s current maintenance and house rules, not a percentage you can assume from another brokerage.
- A deficiency appears. The firm can issue a maintenance margin call or take action under the agreement.
- You either restore the account or the firm acts. Depositing acceptable collateral or selling assets yourself may address the deficiency; otherwise the firm may liquidate.
- The result is posted to the account. If liquidation leaves a debit balance, you remain liable for that amount.
What to do when a call arrives
- Read the notice and account messages immediately. Identify the amount requested, the deadline, the securities involved and any restrictions. Save the notice for your records.
- Review the margin agreement. Look for the firm’s maintenance and house requirements, liquidation authority, acceptable collateral and rules about notice.
- Contact the brokerage through an official channel. Confirm the live deficiency, the exact cutoff time, settlement requirements and which deposits or transfers will count. Do not assume that an electronic transfer initiated before the deadline has settled.
- Decide how to restore equity. Possible approaches include depositing cash, depositing eligible securities or selling positions you choose. Ask the firm to confirm that the proposed action satisfies the call.
- Act before the deadline—and assume the firm can move sooner. FINRA says customers are not entitled to an extension. Even if a representative discusses a later date, the firm’s written agreement and current risk controls govern its ability to liquidate.
- Recheck the account after the transaction. Verify that the deposit or sale posted, the deficiency is closed and no residual debit remains.
Ways to address a margin call
| Action | Who chooses the assets or funds | Important limitation |
|---|---|---|
| Deposit cash | You provide the funds; the firm confirms whether they are received and usable | A transfer that has not settled may not satisfy the call in time. |
| Deposit eligible securities | You propose the securities; the firm decides whether they qualify and how they are valued | Not every security is margin-eligible, and the firm’s valuation rules apply. |
| Sell securities yourself | You select the positions and order the sale | Market prices can move while the order is pending, and proceeds may need to settle before they count. |
| Firm-selected liquidation | The brokerage selects securities or other assets | The firm may act without prior contact and may sell holdings you would not have chosen. |
FINRA identifies cash or securities deposits and customer-directed sales as possible ways to address a call. None guarantees that the firm will wait, accept a particular security or permit an extension.
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Suppose you contribute part of a purchase price and borrow the rest. The stock then falls sharply. Your equity can be wiped out while the loan remains outstanding. If the brokerage sells the stock and receives less than the loan balance, the account shows a debit. You must still pay that debit under the agreement, even though the securities are gone.
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The leverage effect works in both directions: a relatively small percentage decline in the stock can represent a much larger percentage loss on your own capital. A forced sale can also occur during a fast market, when execution prices differ materially from the price that triggered the call. The firm does not promise to wait for a rebound or to sell at a price you consider acceptable.
Baseline rules versus house rules
| Requirement type | What it represents | Why it matters to your call |
|---|---|---|
| Regulatory or baseline maintenance requirement | A minimum framework established under applicable rules | Falling below it can create a maintenance deficiency, but the exact rule depends on the account and security. |
| Firm house requirement | The brokerage’s own risk limit, which can be higher or changed | A call may occur earlier than you expect from a general rule, and FINRA says firms can raise it without advance notice. |
| Your margin agreement | The contract governing calculations, notices, collateral and liquidation powers | It controls the practical deadline and what the firm may do in your account. |
Do not use a percentage quoted for another account as your personal safety line. Ask your brokerage how it calculates maintenance and house requirements for each position, whether requirements change intraday and which assets may be liquidated.
The 2026 intraday margin update
FINRA’s article “Understanding the New Intraday Margin Requirements” says new requirements became effective June 4, 2026. Firms that need more time may use a transition period running through October 20, 2027. The article describes a minimum equity level of 25 percent of the current market value of long, margin-eligible equity securities throughout the trading day for the covered requirements.
That 25 percent figure is not a universal margin-call threshold for every investor. The transition applies to firms implementing the requirements, and account treatment can differ by firm, security and account type. A brokerage’s current disclosures and your agreement determine whether and how the intraday rule applies to you.
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How to reduce the chance of a forced sale
Monitor collateral, not just profit and loss
Check the account’s equity, loan balance, maintenance requirement and available buying power. A position can appear profitable relative to your purchase price while still failing a changed house requirement.
Keep a liquidity plan
Know which cash sources or unleveraged assets could be transferred quickly, and understand settlement times. Do not count on being able to sell a different account or arrange financing after a fast market move.
Ask the firm specific questions before borrowing
- What maintenance and house percentages apply to each security?
- Can requirements change without advance notice?
- Are requirements evaluated intraday?
- Which positions or account assets can be liquidated?
- How will the firm notify me, and can it act before notification?
- What deposit methods and settlement times satisfy a call?
Common misconceptions
“The broker must call me first.”
Not necessarily. FINRA says a firm may sell without contacting you first. Electronic alerts and telephone calls are conveniences, not a condition that must occur before liquidation.
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You can place your own sale to try to restore equity, but if the firm liquidates, it may choose the securities or other assets.
“The firm must give me several days.”
There is no guaranteed extension. The agreement, the firm’s policies and the circumstances determine how quickly it acts.
“The deposit is the maximum I can lose.”
Leverage creates a loan obligation. A sale that does not cover the debt leaves you responsible for the shortfall.
Questions to resolve with your brokerage
When the account is stable, ask for written explanations of the maintenance formula, house overlays, intraday monitoring, eligible collateral, settlement deadlines and liquidation sequence. Keep the firm’s margin agreement and current disclosures accessible. When a call is active, request the amount and deadline in writing, but do not delay action while waiting for a callback.
A margin call is therefore both a market-risk event and a contract-enforcement event. The stock’s decline may start the problem, but the firm’s current requirements and agreement determine the response. Promptly restoring equity can give you more control over which assets leave the account; it cannot guarantee that the brokerage will wait or that a remaining debit will be forgiven.
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