If you buy on margin and the value of your securities declines, your brokerage firm can require you to deposit cash or securities to your account immediately, or sell any of the securities in your account to cover any shortfall, without informing you in advance. The brokerage firm decides which of your securities to sell. Even if the brokerage firm notifies you that you have a certain number of days to cover the shortfall, it still may sell your securities before then. A brokerage firm may at any time change the threshold at which customers are subject to a margin call.
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Read our investor alert on the significant risks of short-term trading based on social media.
Know the Risks of Day Trading
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Investing Quiz – May 2021
Test your knowledge on common investing terms and strategies and current investing topics.