What Is the Difference between a Margin Call and a Stop-Loss Order?
A margin call is an automated alert from the exchange that the account is under-margined and at risk of forced liquidation. It requires the trader to take action.
A stop-loss order, conversely, is a pre-set order placed by the trader to automatically close a position at a specific, less favorable price to limit potential losses. The stop-loss is a proactive risk management tool chosen by the trader; the margin call is a reactive warning from the exchange.
