Liquidity · Core
Margin Call
A margin call is a demand to post more collateral when the account equity falls below maintenance — pay, pledge, or be sold out.
Definition
Marks move against you; equity / IM drops below the house or CCP threshold; you have hours (or minutes) to post. Failure is liquidation at the house’s prices. Cross-margining can hide concentration until it does not.
Why it matters
Forced selling is how a price shock becomes a liquidation cascade. Calls arrive when liquidity is worst.
Case
Archegos received margin calls on total-return swaps, failed to meet them, and the Street dumped the same names. The call was the event.
How to read it
Time-to-post, eligible collateral, and whether the house can change haircuts intra-day. A call is a cash-flow, not an opinion.
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