what is a margin call 
if a trader or investor has an account that has fallen below the brokerage s minimum margin requirement then the brokerage can place a margin call on the account in which case the investor would have to either deposit additional funds into his account or sell off some of the shares he is holding for which he took a loan in order to invest to begin with barring that the brokerage has the authority to sell some of the investor s shares even without his permission to make up the difference for example if a trader wishes to purchase 500 shares of a stock that costs 50 per share if the trader does not have the 25 000 necessary to purchase those shares he may put up half of the amount from his own equity and borrow the other half from the brokerage most brokerages require a maintenance margin of 25 which is to say that the equity value the amount that the trader put up for the shares must be at least 25 of the total value of the shares if the stock proves to be a wise investment and increases in value the investor can earn a tidy sum and repay his loan to the brokerage however imagine the value of the stock falls to 30 the initial investment of 25 000 is now worth only 15 000 the amount loaned by the brokerage remains the same but the equity invested by the trader is now worth only 2 500 which is below the maintenance margin of 3 750 25 of the current 15 000 value now the brokerage can and likely will make a margin call requiring the trader to either deposit additional funds into the account or sell off whatever percentage of the shares would be needed to bring the account to within the range of the maintenance margin 