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Glossary · PSX term

Margin call.

A margin call is a demand to add funds when your leveraged position loses value past a limit.

Definition

If the shares bought on margin fall, the broker may require more margin to maintain the position, or it can be sold to cover the loan. Margin calls can force selling at the worst time, locking in losses.

Worked example

If your MTS collateral drops below the required level, you get a margin call to top up or have the position liquidated.

Related on PSX Clarity

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Margin financing
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Leverage
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