Money Sense


Monday, August 20, 2007

What is Margin Call?

A margin call may occur when the market value of your shares fall, causing the margin ratio to fall below 140%. If the margin ratio falls below 140% but is above or equal to 130%, you have 3 market days including the date of notice to restore the margin ratio to 140%. You can do so by depositing cash, shares or by liquidating some of the securities.

If the margin ratio falls below 130%, you would have to restore the margin ratio to 140% on the same day of notice before 3.00 p.m. On the other hand, if the value of your securities increases, your purchasing power will also increase.