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Generally the phrase is used in relation to equity investing. The investor has an account with their broker where they are allowed to borrow against the value of the shares held in the account. The loan terms specify that the maximum loan can be no more than XX% of the value of the shares. Lets assume for a minute that the limit is 50% Loan To Value (LTV). A margin call is triggered when the value of the shares exceeds the LTV limit. The shares have dropped in value while the loan has remained the same producing less security for the broker who made the loan to the borrower. The borrower has a specific amount of time to pay down the loan by depositing more cash or the broker will sell shares in the open market and continue to do so until the LTV is back in line.
Wiki User
∙ 15y ago
A margin call occurs when the value of securities held in a margin account falls below a certain level, usually set by the brokerage firm. The investor is then required to deposit additional funds or sell securities to bring the account back up to the required level. If the investor does not meet the margin call, the brokerage firm may liquidate the securities in the account to cover the outstanding balance.
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When was Margin Call released?
Margin Call was released on 10/21/2011.
What is the difference between buying on margin and margin call?
Buying on margin, taking a "margin" loan from the broker to help buy part of a stock purchaseMargin call, this happens when the broker demands full payment of your "margin" loan
How much money did Margin Call gross worldwide?
Margin Call grossed $17,872,206 worldwide.
How much money did Margin Call gross domestically?
Margin Call grossed $5,353,586 in the domestic market.
Which movie theaters did Margin Call play in?
poopie caca
What happen when a person bought a stock on margin?
If they had bought a very large amount of stock on margin (and many did) and the "margin call" came in shortly after that with the market collapse (and it happened to countless people) they were, in effect, instantly bankrupt.
What happens when you Short a call option?
"Shorting a call" is better known as writing a naked call. Basically, a naked call is a call on a position you don't hold, and it has unlimited risk--if you get exercised and the strike price plus the premium is lower than the stock price, you must make up the difference out of your margin account--or you'll receive a margin call from your brokerage. Many brokerages won't allow you to write a naked call, and the ones that will demand a very large margin account and a lot of experience in trading options.
The situation in which an investor is asked to put more money to cover his or her loan on stock?
margin call
Why was buying on a margine risky?
If the stock has not gone up when the margin call is due, you lose money.
What does stocks on margin mean?
05/08/08 Buying on margin means that you are buying your stocks with borrowed money_______________________________________________________________It means that you've borrowed money to finance your stock purchase. This is very risky and may lead to a margin call if the share price declines.
What does stock margin mean?
05/08/08 Buying on margin means that you are buying your stocks with borrowed money_______________________________________________________________It means that you've borrowed money to finance your stock purchase. This is very risky and may lead to a margin call if the share price declines.
What is the continental margin margin?
the margin of the continental
