What is a margin call? What is a margin call example?
Margin trading is a popular investment strategy that involves borrowing funds from a broker to buy more assets than one would be able to purchase with their own capital. However, margin trading comes with a risk. If the value of the assets purchased with borrowed funds drops below a certain threshold, the broker may issue a margin call, which requires the trader to deposit more funds or sell their assets to cover the losses. In this article, we will explore what a margin call is, how it works, and provide an example to help readers better understand this concept.
James Dean |