Margin Call - 5/17/13 | TigerDroppings.com
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Doc John
LSU Fan
The Cave
Member since Nov 2010
343 posts

Margin Call

Can somebody explain this stock technique to me in non-broker jargon.


GrantTheFan
LSU Fan
Baton Rouge
Member since Nov 2010
289 posts
Online

re: Margin Call
You borrow the money to buy the stock(s). Most brokerages have some minimum account value threshold before they'll allow you to have margin privileges. There can be varying levels of margin allowed, but it's generally a 30% minimum, so for example if you have 10k in equity, you can margin up to 7k of purchases. If the stock(s) drop in value below that threshold, the brokerage will give you a margin call, meaning to have X amount of time to deposit cash into the account or they will sell enough of your stock(s) to meet that margin call.


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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
31425 posts

re: Margin Call
quote:

Can somebody explain this stock technique to me in non-broker jargon.


It means you made a large bet that didn't work out.


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