CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.

Margin call definition

What is margin call?

A margin call is the term used to describe the alert sent to a trader to notify them that the capital in their account has fallen below the minimum amount needed to keep a position open. A margin call can mean that the trader has to put up additional funds to balance the account, or close positions to reduce the maintenance margin required.

Margin call can also be used to describe the status of your account – ie you are ‘on margin call’ because the funds in your account are below the margin requirement.

When you trade with leveraged products – such as CFDs – there are two types of margin: a deposit margin, needed to open the position, and a maintenance margin, needed to keep the position open. It is the failure to uphold the latter that will trigger a margin call.

If a trade starts to lose money, the funds in your account may no longer be enough to keep the position open and your provider will ask you to top up your account in order to bring your balance up to the minimum margin – this notification is a margin call. If you top up your funds, the position will remain open. If not, your provider may close the position and any losses incurred will be realised.

The term margin call came from the practice of brokers calling their clients to notify them of the account deficit. But these days, most margin calls are delivered by email.

Learn more about margin calls

Discover IG's margin requirements and margin call procedure.

Example of a margin call

With IG, for example, we use ‘margin call’ to describe the status of your account. You will be placed on margin call if the equity in your account falls below 100% of your maintenance margin – at this point, you will be notified by email. If your account balance falls below 75% of your margin requirement, you will receive a second email notification. We would only start to close positions if your margin falls below 50% of the required capital.

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CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.