What is a margin call? A guide to forced selling and leverage risk

A margin call warns that your collateral can no longer support an open leveraged position. Ignore it and the exchange closes the trade for you. Summary A margin call is a notification that a leveraged position’s equity has fallen below the exchange’s maintenance threshold, requiring additional collateral or a reduction in position size. Margin calls sit between healthy positions and forced liquidation; they are a warning, not an execution. On major exchanges such as Binance and Bybit, the maintenance margin rate for large-cap pairs like BTCUSDT starts at 0.5 percent of position value and rises with notional size. The October 2025 liquidation cascade wiped out roughly $19.3 billion in leveraged positions within 24 hours after traders ignored or could not meet margin calls fast enough. Understanding initial margin, maintenance margin, and liquidation price is the minimum knowledge required before opening any leveraged crypto trade. A margin call is a concept borrowed from traditional finance that carries sharper consequences in cryptocurrency markets. In equities, a broker phones you (the origin of the word “call”) and gives you a day or two to deposit more money. In crypto, the proc...