Margin Call - Page 3

A margin call occurs when the value of a trader’s account falls below the required maintenance margin in a leveraged cryptocurrency position. Exchanges issue margin calls to request additional funds or collateral to keep the position open. If the trader fails to deposit enough funds, the exchange may liquidate part or all of the position to cover losses. Margin calls are a risk management tool for both traders and exchanges. They help prevent excessive losses in leveraged trading and maintain market stability.