Margin
Margin Call Definition
Margin call definition for Series 7 candidates, with Reg T and maintenance context, example, common mistakes, and margin practice links.
Definition
Exam relevance
Practice links
Definition
A margin call is a demand for the customer to deposit cash or securities when an account does not meet an initial or maintenance margin requirement.
Why it matters on the Series 7
Series 7 margin questions test whether you can identify equity, debit or credit balance, Reg T requirements, maintenance requirements, and how market moves affect the account.
Example
If a long margin account falls below the required maintenance equity, the firm can require the customer to deposit additional funds or securities.
Common mistakes
- Using long-account formulas on short accounts.
- Confusing an initial Reg T call with a maintenance call.
- Forgetting that market value changes drive equity changes.
Related concepts
- Series 7 margin
Review long and short account mechanics.
- Margin formulas
Work Reg T, SMA, equity, and buying power.
- Margin practice questions
Drill margin call scenarios.
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