GlossaryAdvanced
Margin Call
A warning that additional collateral is needed to avoid a leveraged position being liquidated.
A margin call is a warning that a leveraged position's posted collateral has fallen close to the level required to avoid liquidation, generally requiring the trader to add more collateral or reduce the position.
On many crypto platforms, this process is fully automated, with limited or no opportunity to respond before liquidation actually occurs.
Examples
- A margin call gives a trader a chance to add collateral before a position is automatically liquidated.
- Automated crypto platforms may liquidate a position quickly, with less warning time than some traditional markets.