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Home>Courses>Trading 101>Lesson 6 of 8

Margin and margin calls

The deposit that backs a leveraged trade, and what happens when it runs low.

Trading 101·Lesson 6 of 8

All lessons

By the end of this lesson you'll be able to:

  • 01Define margin
  • 02Explain what triggers a margin call
  • 03Avoid forced liquidation
1

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

What Is a Margin Call and How Does It Work?
Key terms
LeverageLiquidationMarginMargin Call

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

  1. Question 01

    What is margin?

  2. Question 02

    Unlike a fee, what is margin?

  3. Question 03

    A broker requires 5% margin on a $10,000 position. What is your required margin?

  4. Question 04

    With higher leverage, what happens to the margin required to open a position?

  5. Question 05

    When is a margin call triggered?

  6. Question 06

    You open so many positions that almost no free margin is left. What is the danger?

  7. Question 07

    If you do not meet a margin call, what may the broker do?

  8. Question 08

    What is a good way to avoid margin calls?

  9. Question 09

    Your equity dips just below the required margin. What will most likely happen?

  10. Question 10

    How is margin best thought of?

Answered 0 of 10 · pass 70% (7/10) to complete

Trading 1016 of 8
  1. How to start trading
  2. Bid, ask, and the spread
  3. Market vs limit orders
  4. Stop and stop-limit orders
  5. Understanding leverage
  6. →Margin and margin calls
  7. Liquidity and slippage
  8. Pips and lot size
  9. ⚑Final Assessment· 20 Q