What is a Margin Call?
In margin trading, clients borrow funds from the broker (e.g., CFDs). A margin call occurs when the value of investments decreases, and you need to deposit more money or reduce positions.
Why do Margin Calls occur?
- Market downturns: If your investments lose value, your account balance might fall below the required level.
- Increased risk: Borrowing increases your vulnerability to market fluctuations, making margin calls more likely.
What to do in the event of a Margin Call?
Reduce the size of your open positions and/or deposit more money.
Risk of a Stop-Out: If no action is taken, Saxo may close some or all open positions to reduce risk.
You can find helpful information about margin here.