Whether it be in futures markets or equity markets, does the margin call occur when the amount HITS the margin, or when it goes BELOW the margin? i.e. initial requirement is 5, margin is 3, account hits 3. Will there be a margin call, or will there only be a margin call at 2.9? Thanks.
I think that you receive a margin call when the price is below the margin- I see this maintenance margin as a minimum amount and only when this amount decreases under this level you will receive a margin call. Also if you receive a margin call in the futures markets you have to increase your acount until the initial margin. In the stock market it is not necessary to do it, you just have to increase your account above maintence margin.
yep, i know about that. i was just curious of when you actually have to increase it.
From my understanding you will get a call when your account is AT the maintenance. I could be wrong. Check out the formula for the price of the stock you should expect a margin call at, that should probably shed some light on it. Price = Purchase Price*((1-initial margin%)/(1-maintenance margin%)) My 2 cents.