A Margin Call is a red-flag warning that the available capital in the trading account is less than the minimum amount required to maintain the open positions.
This minimum amount required is a fixed percentage determined by the broker. Many brokers consider a Margin Call when the Margin Level drops below 100%. In this case, the trader has two options:

1. Deposit more money in their trading account or
2. Close losing trades to free up Margin
For example, in the example below the Margin Call is determined by the broker at 100%:

Balance $8,000
Floating Loss $3,500
Margin Used (in open positions) $4,000

Recall that the Margin Level is the ratio of the Equity to the Margin Used times 100.

((Balance – Floating Loss) / Margin Used) x 100

(Equity /Margin Used) x 100
(4500/4000) x 100
1.125 x 100
Margin Level = 112.5%

So, when the Margin Level drops below the 100% level, a Margin Call will be triggered. The broker will automatically send an email to the trader alerting them to take the appropriate actions.

As the Margin Level is in the “red zone” and approaching the Stop Out level, it is deemed necessary to either deposit more money or close losing positions to free up Margin.

Watch the Margin Level closely!