What is a Margin Call Alert?
Margin call alerts can be simply explained as a message sent to the client when his session holdings or exposure exceed his actual cash (Not Trading Limit) by a margin of 30%. This generally happens when a client using a margin account, utilizes almost all of his trading limit and the value of the scrips held are declining in price per share. As the price declines, it reflects negatively on the actual cash holding (Not Trading Limit). Scrips are organized in nature by classes under margin values (Class A to E that vary from 20% Margin to 100% No Margin). These can be found under ‘Portfolio’ in the client account. When the price of a share falls, according to the percentage amount of margin associated to it, deductions are made from the actual cash limit. When the actual cash is reduced by 30%, margin call alerts are sent to clients to either sell of their exposure or a portion of the exposure in order to square off their position.
