What is a margin call?
The main difference between say, a margin loan and a conventional property loan, is that your shares and managed funds can change in value each day. If your equity - the value of the assets that you contributed to the investment - falls below the agreed lending ratio, you may be issued with a margin call.
If this happens, your lender will ask you to provide additional funds to restore at least the minimum equity position. To help protect against small market fluctuations, there is usually a 'buffer' (typically 5% of your total portfolio value) within which a margin call may not be made.
