# A call for additional margin and often a margin call

- Canonical URL: https://www.gerhardmerk.de/a-call-for-additional-margin-and-often-a-margin-call
- Post ID: 588913
- Modified: 2023-07-25T20:46:39+00:00
- Language: en

## Definition

Generally, the requirement for a debtor to bring the pledges deposited to cover his loan up to the level specified in the contract by delivering further collateral (additional coverage). - Especially in futures trading: the request by the bank or stockbroker or prime broker to its customer to pay further money into its margin account to cover an unfavorable price movement that has occurred (a communication to an investor to put up more collateral for securities bought on credit. The lender, usually the brokerage firm, makes the call to cover an adverse price movement on a futures position). - The margin call assures the bank or broker that the customer is willing and able to meet its obligation under a futures contract. If the customer fails to meet the margin call - in the case of commodity exchanges in the U.S., the deadline is often only one hour - his position is forcibly closed out, which can lead to substantial losses but then, under certain circumstances, to oversupply with price collapses on the exchange. - See close-and-reprice, counterparty, central, margin call, margin cover, variation margin, variation margin threshold, variation margin agreement, overnight credit. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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