Margin call
Also called: margin warning · margin alert
Definition
A margin call is a warning that your collateral has fallen close to the minimum required for a leveraged position, so you need to add margin or reduce the position to avoid liquidation.
This entry is shown in English.
How Margin call works
In traditional finance, a broker calls you to demand more collateral. On crypto exchanges, a margin call is usually an automatic app notification, email or on-screen alert when your margin ratio passes a warning level. It is not a request you must answer; if you do nothing and the price keeps moving, liquidation follows automatically.
You have three main responses. You can add collateral, which moves your liquidation price further away. You can close part of the position, which lowers the margin required. Or you can close the whole position and accept the loss. Doing nothing is also a choice, and it lets the liquidation engine decide for you.
Warning thresholds, notification channels and timing differ by exchange, and fast markets can move from warning to liquidation within seconds. Treat a margin call as evidence that your position was too large or your stop-loss too far away, rather than a reason to keep adding money to a losing trade.
Example
Suppose you hold an isolated 10x long worth 15,000 USDT with 1,500 USDT of margin, and the exchange warns you when your margin balance falls below half of the initial margin. After a 6% drop, your unrealized loss is 900 USDT and your margin balance is 600 USDT. You receive a margin call. Adding 600 USDT pushes your liquidation price roughly 4 percentage points lower; closing half the position cuts the required margin in half.
Common mistakes
- Repeatedly adding margin to a losing position instead of rethinking the trade.
- Relying on notifications arriving in time during a fast move.
- Assuming a margin call gives you a fixed grace period before liquidation.
Learn and practise
FAQ
Do crypto exchanges give margin calls?
Most send automatic warnings when your margin ratio gets high, but the exchange will liquidate without waiting for you to act.
Should I add margin after a margin call?
Only if your original trade idea is still valid and the added amount fits your risk plan. Often reducing the position is the safer choice.