How Does a Trader Meet a Margin Call to Avoid Liquidation?
A margin call is a notification from the exchange that a trader's margin level is approaching the maintenance margin requirement. To meet the call and avoid liquidation, the trader must deposit additional collateral into the margin account.
Alternatively, the trader can partially close the losing position to reduce the required maintenance margin. The goal is to bring the margin level back above the maintenance threshold.
Glossar
Margin Level
Metric ⎊ Margin level is a critical quantitative metric used to assess the health and risk exposure of a leveraged trading account.
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.