What does “Margin Call Level” or “Margin Call”?
In forex trading, the Margin Call Level is when the Margin Level has reached a specific level or threshold.
When you reach this threshold, you are in danger of the POSSIBILITY of having some or all of your positions forcibly closed (or “liquidated“).
The Margin Level is the “metric” and the “Margin Call Level” is a specific “value” of the metric (which is the Margin Level).
Yeah, it’s awkward. But don’t blame us, we’re not the ones who name these things.
For example, some forex brokers have a Margin Call Level of 100%.
In the specific example above, if the Margin Level in your account falls to 100% or lower, a “Margin Call” will occur.
Not familiar with the concept of Margin Level? Read our lesson, What is Margin Level?
What is a Margin Call?
A Margin Call is when your broker notifies you that your Margin Level has fallen below the required minimum level (the “Margin Call Level”).
This notification used to be an actual phone call, but nowadays, it’s usually an email or text message.
Regardless of how you’re actually notified, the feeling isn’t great.
A Margin Call occurs when your floating losses are greater than your Used Margin.
This means that your equity is less than your Used Margin (since floating losses reduce your equity).