A margin call is a warning that your account's margin level has fallen to the applicable margin-call level of 50%. A margin call does not automatically close your positions. However, if your margin level continues to fall and reaches the applicable stop-out level of 20%, positions may be closed automatically. A margin call does not provide a guaranteed grace period. Market prices can move rapidly, and your Margin Level may reach the stop-out level before you have a practical opportunity to respond.
What happens as my margin level falls?
- Your margin level falls as your equity decreases relative to your used margin.
- At 50%, a margin call is triggered. Your positions generally remain open.
- If your Margin Level continues falling and reaches 20%, the stop-out process may begin.
- During stop-out, positions may be closed automatically.
How will I know about a margin call?
A margin call may be indicated through your trading platform, depending on the platform and account conditions. Do not rely solely on notifications. In a fast-moving market, your margin level can fall quickly and may reach the stop-out level before you have an opportunity to act.
Monitor your Margin Level and Free Margin directly in MT4 or MT5. To check these figures on desktop:
MT4
- Open the Terminal window by selecting View → Terminal or pressing Ctrl+T.
- Select the Trade tab.
- Review your Equity, Margin, Free Margin and Margin Level.
MT5
- Open the Toolbox by selecting View → Toolbox or pressing Ctrl+T.
- Select the Trade tab.
- Review your Equity, Margin, Free Margin and Margin Level.
What can I do after a margin call?
You can take steps to increase your available margin or reduce your exposure, depending on your circumstances:
- Close or reduce positions where appropriate. This reduces the exposure of those positions, but the effect on total used margin depends on your remaining portfolio and account settings.
- Partially close a position. This reduces the position size and may reduce the margin required.
- Add funds to your account. Additional funds increase your equity once the deposit has been successfully credited. Depending on the funding method, this may not be immediate, and a deposit may not be credited in time to prevent a stop-out.
- Reduce your overall exposure. Review your open positions and consider whether your current position sizes are appropriate for your available funds.
The effect of each action depends on your account balance, equity, open positions, margin requirements, and current market prices.
What happens if I take no action?
Your positions are not automatically closed simply because a margin call has occurred. If the market moves in your favour and your equity increases, your margin level may recover and the margin-call condition may no longer apply.
If the market continues to move against your positions and your margin level reaches the applicable stop-out level, positions may be closed automatically.
See When will Moneta Markets automatically close my positions during a stop-out? for more information about the automatic closure process.
How can I reduce margin-call risk?
You can reduce margin-call risk by monitoring your Margin Level and Free Margin, maintaining sufficient available margin and limiting your overall exposure.
- Keep sufficient free margin available when opening positions.
- Use position sizes appropriate for your account and risk tolerance.
- Consider using Stop Loss orders to manage potential losses.
- Monitor your margin level, particularly during periods of high market volatility.
- Review your exposure before periods when markets may experience significant price movements.
- Monitor positions opened by an EA or copied from a signal provider, as multiple positions may be opened within a short period.
