# What Is a 'Margin Call' and What Triggers It? ⎊ Path

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

---

## What Is a ‘Margin Call’ and What Triggers It?

A margin call is a demand from the clearinghouse or broker for a trader to deposit additional funds into their margin account. It is triggered when the account equity falls below the maintenance margin level due to losses on the futures position.

The trader must meet the call immediately or risk having their position forcibly liquidated.

- [What Is the Mechanism of a “Margin Call” and What Triggers It in a Crypto Derivatives Exchange?](https://learn.greeks.live/path/what-is-the-mechanism-of-a-margin-call-and-what-triggers-it-in-a-crypto-derivatives-exchange/)

- [What Is the Difference between a “Pull” and “Push” Oracle Model?](https://learn.greeks.live/path/what-is-the-difference-between-a-pull-and-push-oracle-model/)

- [What Is a Margin Call and What Action Does It Necessitate from the Trader?](https://learn.greeks.live/path/what-is-a-margin-call-and-what-action-does-it-necessitate-from-the-trader/)

- [What Is a ‘Margin Call’ and What Action Is Required?](https://learn.greeks.live/path/what-is-a-margin-call-and-what-action-is-required/)

- [What Is the ‘Maintenance Margin’ Level in Derivatives Trading?](https://learn.greeks.live/path/what-is-the-maintenance-margin-level-in-derivatives-trading/)

- [What Is a ‘Margin Call’ and How Is It Related to Leverage?](https://learn.greeks.live/path/what-is-a-margin-call-and-how-is-it-related-to-leverage/)

- [What Is a ‘Margin Call’ and What Triggers It in a Volatile Crypto Market?](https://learn.greeks.live/path/what-is-a-margin-call-and-what-triggers-it-in-a-volatile-crypto-market/)

- [What Is a “Margin Call” and What Triggers It?](https://learn.greeks.live/path/what-is-a-margin-call-and-what-triggers-it/)

## Glossar

### [Financial Panic Triggers](https://learn.greeks.live/area/financial-panic-triggers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Catalyst ⎊ Financial panic triggers are specific events or signals that initiate widespread fear and irrational selling across financial markets.

### [Bear Market Triggers](https://learn.greeks.live/area/bear-market-triggers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Catalyst ⎊ Bear market triggers in cryptocurrency derivatives represent specific events or conditions initiating substantial price declines, often amplified by leveraged positions and market microstructure dynamics.

### [Short Squeeze Triggers](https://learn.greeks.live/area/short-squeeze-triggers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Catalyst ⎊ A short squeeze trigger, within cryptocurrency, options, and derivatives markets, represents an event initiating rapid short covering as bearish positions face escalating losses.

### [Loan Health Triggers](https://learn.greeks.live/area/loan-health-triggers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Metric ⎊ Loan health triggers are defined by specific metrics, primarily the collateralization ratio, which compares the value of the collateral to the outstanding loan amount.

### [Early Liquidation Triggers](https://learn.greeks.live/area/early-liquidation-triggers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Condition ⎊ These are specific, often dynamically calculated, thresholds that, when breached by market movement or margin depletion, automatically initiate the liquidation process for a leveraged position.

### [Forced Closure Triggers](https://learn.greeks.live/area/forced-closure-triggers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Mechanism ⎊ Forced closure triggers are predefined quantitative conditions that initiate the automatic liquidation of a leveraged trading position to prevent the account balance from falling below zero.

### [Assignment Triggers](https://learn.greeks.live/area/assignment-triggers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Trigger ⎊ Assignment triggers are specific events that initiate the fulfillment of an options contract obligation for the short position holder.

### [Avoiding Liquidation Triggers](https://learn.greeks.live/area/avoiding-liquidation-triggers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Mitigation ⎊ The practice of actively managing leveraged positions to prevent the account's equity from falling below the maintenance margin level constitutes a core risk mitigation effort.

### [Quick Liquidation Triggers](https://learn.greeks.live/area/quick-liquidation-triggers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Mechanism ⎊ Quick liquidation triggers are predefined conditions that automatically initiate the rapid closure of a leveraged trading position, typically in cryptocurrency futures or options, to prevent further losses or maintain margin requirements.

### [Liquidity Crisis Triggers](https://learn.greeks.live/area/liquidity-crisis-triggers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Trigger ⎊ Liquidity Crisis Triggers are specific events or market conditions that initiate a rapid and severe contraction of market depth, making it difficult to execute large trades without significant price impact.

## Discover More

### [What Are the Consequences of Failing to Meet a Margin Call Promptly?](https://learn.greeks.live/path/what-are-the-consequences-of-failing-to-meet-a-margin-call-promptly/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Are the Consequences of Failing to Meet a Margin Call Promptly?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-Entanglement-of-Volatility-Skew-and-Decentralized-Autonomous-Organization-Governance-Mechanisms.webp)

Failure to meet a margin call results in the exchange's automatic, forced liquidation of the position and loss of margin.

### [What Is a Margin Call in the Context of Futures Contracts?](https://learn.greeks.live/path/what-is-a-margin-call-in-the-context-of-futures-contracts/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a Margin Call in the Context of Futures Contracts?](https://learn.greeks.live/wp-content/uploads/2025/10/High-Contrast-Macro-View-of-Digital-Asset-Storage-Spindle-Securing-Layered-Metal-Substrate.webp)

A margin call is a demand for more funds when losses in a futures position deplete a trader's account below a required minimum.

### [Define "Margin Call" and Its Immediate Effect on an Investor's Psychology](https://learn.greeks.live/path/define-margin-call-and-its-immediate-effect-on-an-investors-psychology/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Define "Margin Call" and Its Immediate Effect on an Investor's Psychology](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Actuation-Mechanism-Rendering-Illustrating-High-Frequency-Exchange-Data-Latency-Mitigation-Strategies.webp)

A demand for more collateral, triggering intense fear and panic-driven decisions to liquidate or add funds.

### [How Does the Price of the Underlying Asset Affect the Size of a Margin Call?](https://learn.greeks.live/path/how-does-the-price-of-the-underlying-asset-affect-the-size-of-a-margin-call/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Price of the Underlying Asset Affect the Size of a Margin Call?](https://learn.greeks.live/wp-content/uploads/2025/10/Deconstructed-Mechanism-Illustrating-High-Frequency-Quant-Execution-Via-Automated-Smart-Contract-Interfacing.webp)

A higher underlying asset price increases the potential loss per contract, leading to a larger deficit in the margin account and a larger margin call.

### [What Is the Difference between a Naked Call and a Covered Call?](https://learn.greeks.live/path/what-is-the-difference-between-a-naked-call-and-a-covered-call/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Difference between a Naked Call and a Covered Call?](https://learn.greeks.live/wp-content/uploads/2025/10/Layered-Stacking-of-Synthetic-Collars-Demonstrating-Delta-Hedging-Portfolio-Construction.webp)

Naked call lacks underlying asset protection, exposing unlimited risk; covered call is protected by ownership of the asset.

### [Is a Margin Call an Indication That the Trader Has Realized a Loss?](https://learn.greeks.live/path/is-a-margin-call-an-indication-that-the-trader-has-realized-a-loss/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Is a Margin Call an Indication That the Trader Has Realized a Loss?](https://learn.greeks.live/wp-content/uploads/2025/10/Aerodynamic-Fin-Geometry-Simulating-Liquidity-Pool-Spreads-in-Decentralized-Finance-Architectures.webp)

Yes, it indicates that realized losses (variation margin outflow) have reduced the account equity below the maintenance margin.

### [Does a Margin Call Happen before or after the Maintenance Margin Is Breached?](https://learn.greeks.live/path/does-a-margin-call-happen-before-or-after-the-maintenance-margin-is-breached/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Does a Margin Call Happen before or after the Maintenance Margin Is Breached?](https://learn.greeks.live/wp-content/uploads/2025/10/Conceptualizing-Decentralized-Finance-Protocol-Governance-Through-Spherical-Derivative-Structures.webp)

Before. It is a warning that the maintenance margin is being approached; liquidation occurs immediately after it is breached.

### [What Is the Risk of 'Margin Call' in a Cross-Margined Derivatives Portfolio?](https://learn.greeks.live/path/what-is-the-risk-of-margin-call-in-a-cross-margined-derivatives-portfolio/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Risk of 'Margin Call' in a Cross-Margined Derivatives Portfolio?](https://learn.greeks.live/wp-content/uploads/2025/10/Symmetrical-Bifurcation-Involving-Teal-Actuator-Segments-Near-Mirroring-Reflective-Surfaces.webp)

The risk is a mandatory request for additional collateral when net portfolio equity falls below maintenance margin, often leading to liquidation.

### [What Is the Difference between a 'Covered Call' and a 'Naked Call' Strategy?](https://learn.greeks.live/path/what-is-the-difference-between-a-covered-call-and-a-naked-call-strategy/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Difference between a 'Covered Call' and a 'Naked Call' Strategy?](https://learn.greeks.live/wp-content/uploads/2025/10/Intersecting-Metallic-Blades-Representing-Cross-Asset-Hedging-Strategies-in-Digital-Asset-Volatility-Markets.webp)

Covered call sells a call against owned assets (limited risk); naked call sells a call without owning the asset (unlimited risk).

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---

**Original URL:** https://learn.greeks.live/learn/what-is-a-margin-call-and-what-triggers-it/
