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Finance Glossary

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Margin Call

Definition:

If you are on margin and your position gains in value, that's great. But if you're losing ground, remember that your broker who loaned you part of the purchase price is along for the ride. That losing position is the collateral for the loan, so if the collateral is eroding, your broker will call you and demand that you put more money -i.e., more collateral - into your account or else the broker will close out that position.

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