What is Margin Call?

A margin call is not the kind of “call” you want to get. In the past, it was a phone call from your broker, but these days it is an email or alert to let you know the available margin in your account is getting dangerously low.

A margin call happens when the account value falls below the broker's required minimum requirement. When this happens, the broker will require the trader to deposit additional funds into their account to balance the minimum maintenance margin. If you do not have enough funds in your account to cover a potential loss, your trade may be placed into a “Margin Call.”

Once the margin level of your account reaches below 100%, a margin call notification will be sent to inform you that your equity is no longer sufficient to hold your existing trades.

If you receive a margin call notification, you have four options:

• Wait for a Price Correction: Do nothing and hope the market reverses to a favorable position.
• Deposit Additional Funds: Increase your margin level by adding more funds. However, be aware that if the market continues to move against you, you may face another margin call.
• Close Problematic Trades: Close the underperforming trades and accept any losses to prevent further risk.
• Hedge Problematic Positions: Open opposite positions to try and benefit from market movements in the other direction. Hedging is a high-risk strategy; while it reduces the margin used, it incurs double swaps and carries the risk of losses on both trades if the market remains in an unfavorable range ("No man's land").

While Axi does send margin call notifications once the margin level reaches below 100%, clients must not rely on notifications before taking action. Axi cannot and does not guarantee that margin calls will be received, or that sufficient time will be available to add funds and avoid losses.

It is the responsibility of the client, not Axi, to monitor margin requirements and ensure sufficient free equity is maintained to meet any potential adverse market movements. We will do our best to notify any client approaching a margin call position, but Axi is not responsible for preventing losses.