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What Is a Margin Call and How Is It Related to Marking-to-Market?

A demand for additional funds when MTM losses cause the margin account to fall below the required maintenance level.
Greeks.Live03.11.25

What Is a Margin Call and How Is It Related to Marking-to-Market?

A margin call is a demand from the broker or clearing house for a trader to deposit additional funds into their margin account. This occurs when the account balance falls below the maintenance margin level.

Marking-to-market is the process that triggers this call. If daily losses calculated by MTM deplete the margin below the required minimum, a margin call is issued to restore the margin.

Failure to meet the call can lead to forced liquidation.

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