Margin calls

A margin call is when you are required to repay a portion of your loan. It occurs when your loan amount exceeds the amount you're allowed to borrow based on your portfolio value. If evaluating from a maintenance requirement perspective, a margin call occurs when your portfolio value falls below your blended maintenance requirement amount.

Margin calls can happen for a variety of reasons, including a decline in the value of your holdings, ACH reversals, or purchasing securities with lower LTVs.

How do I avoid a margin call?

• Monitor your account value and securities to ensure you have sufficient value compared to your outstanding loan balance
• Use our forecaster to help you forecast portfolio performance and your margin call risk

What do I do if I get a margin call?

Margin calls are typically due within 3 business days (T+3); for example, if a margin call is created on Wednesday, your margin call will be due at the end of business the following Monday, assuming there are no trading holidays.

Though margin calls are typically due within three business days, we reserve the right to require the margin call be met sooner. This usually occurs when we deem your loan is at greater risk due to market volatility, portfolio concentration and unforeseen market events, to name a few.

You can meet a margin call in the following ways:

• Depositing cash
  • You can deposit cash equal to the amount of the margin call
• Selling securities
  • The amount of securities you need to sell is based on your blended LTV
  • Examples:
    • If your blended LTV is 75%, you will need to sell 4 times the call amount in securities.
    • If your blended LTV is 50%, you will need to sell 2 times the call amount in securities.

If you do not satisfy a margin call, you risk your position(s) being liquidated to resolve the call.

Please note: margin calls are cumulative, which means the margin call amount will change based on the change in value of your account once a call is issued.

PDT Call

A PDT Call call is issued when the value of an account that is flagged as a Pattern Day Trader (PDT) drops below $25,000 at the close of a trading day.

How to satisfy a PDT Call:

To meet a PDT call, you must deposit funds or securities to bring your account value above $25,000. Market appreciation that moves your account value above $25,000 at the close of trading day will also resolve the call.

What happens if you do no meet a PDT call:

If an account with a PDT call performs another day trade, the account will be restricted to selling only for 90 days or until the call is met.