Does a Margin Call Happen before or after the Maintenance Margin Is Breached?
A margin call is intended to happen before the maintenance margin is breached. It is a warning that the trader is approaching the critical threshold.
Once the maintenance margin is breached, the automated forced liquidation process begins immediately, making a traditional margin call obsolete at that point.
Glossar
Margin Call
Trigger ⎊ A margin call in cryptocurrency, options, and derivatives markets represents a broker’s demand for additional funds to bring an account back to the minimum required margin.
Forced Liquidation Process
Liquidation ⎊ The forced liquidation process, particularly within cryptocurrency derivatives and options trading, represents a critical risk management mechanism triggered when an account’s margin falls below the required maintenance level.
Maintenance Margin
Collateral ⎊ Within cryptocurrency derivatives and options trading, the maintenance margin represents the minimum equity a trader must maintain in their account to cover potential losses.