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Margin Call Meaning

A "warning" from a broker or exchange that the value of your account has dropped too low to support your open leveraged positions. It is a request for you to "Deposit more funds" or "Close your positions" to bring your "Margin" back up to the required level.

Historically, this was a physical "phone call" from a broker. Today, it is an automated email or app notification.

If you ignore the margin call and the price continues to drop, the exchange will automatically trigger a Liquidation, selling your assets at the market price to pay back the money you borrowed. Receiving a margin call is a sign of "Over-leveraging." It means your "Safety Buffer" has been exhausted.

Experienced traders avoid margin calls by using "Stop-Losses" and "Position Sizing," ensuring they never risk so much on a single trade that a small price move puts their entire account at risk.

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