How a margin call works
A margin call is the broker’s warning that your account equity has fallen too close to the margin required to keep your positions open. It is the alarm before the stop-out: a signal to add funds or reduce positions, because losses have eaten most of your free margin and you are near the point where the platform starts force-closing trades.
Worked example
You open leveraged positions using most of your margin as cushion. The market moves against you and your equity drops toward the maintenance margin. At a set level, the platform issues a margin call. If you add funds or close some positions, you restore your buffer. If you ignore it and the loss deepens, the equity hits the stop-out level and positions are force-closed automatically, starting with the worst.
Avoiding margin calls on Volity
The way to never face one is to keep free margin well above the requirement, which means sizing with position sizing rather than maxing out leverage. On Volity, negative balance protection ensures even a force-close cannot push you below your deposit, but a margin call still means your risk was too large for your account. Treat it as a serious signal.
Not every venue sends a call before it acts. On a perpetual futures venue the position simply closes when account value reaches the maintenance requirement, so the number to watch is the liquidation price. Our guide to reading margin health and liquidation price shows how to work it out and how to move it further away.
Why it matters
A margin call is the market telling you that you are overexposed before it closes your trades for you, so reaching one is a sizing failure, not bad luck. Keep a fat margin buffer and you will never see it. Related: stop-out and margin.
Learn more in our forex trading guide.
