What does 100% margin call mean?
Asked 4 years ago
I'm currently trading through a forex broker and want to try out margin calls. But, there's a lot that I need to learn! What determines the threshold for my margin call level? ( I think I need someone to explain the difference between a margin level and a margin call level) Also, what does it mean if I set a 100% margin call?
Andia Rispah Igobwa
Thursday, September 09, 2021
A margin call is where an investor must put more money into their trading account, or they will be forced to sell on the market.
A trading account with 100% equity used on margin would typically mean that all investors' funds are at risk because any new orders executed on the trader's side may exceed the available funds in their account, so it cannot support these new orders. This warrants a margin call for the request of more funding before any other trades are caused to execute incorrectly.
If you have reached your capital limit, you can no longer reach this level without extra funding. It also means that if there are any losses incurred while using this amount of margin, it can significantly affect a person's portfolio.
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