Margin call

A margin call happens when losses on your open trades shrink your usable margin too far. It’s a warning sign. If your equity keeps falling relative to the margin required, the broker may start closing positions automatically — a stop-out — to limit further losses.

Keeping plenty of free margin, and not over-leveraging, is how you avoid margin calls. Most retail traders lose money, so size positions conservatively.

Related: margin and leverage.