Understanding the meaning of margin call in Chinese: When is margin maintenance triggered and how to avoid it

Margin call中文全解：保证金追缴通知何时砸向你

In leveraged trading, margin call in Chinese corresponds to “保证金追缴通知,” which is a serious signal from the trading platform to the account holder—your account has triggered a risk warning line.

Specifically, when a position established with leverage experiences floating losses that cause the available margin in the account to fall below the platform’s minimum requirement, the platform will initiate a margin call. At this point, traders face two options: either voluntarily close some or all positions to release margin, or immediately inject new funds into the account. Otherwise, the platform has the right to forcibly liquidate positions to prevent further risk.

Margin level is a key indicator of account risk

Understanding margin call in Chinese requires grasping the core concept of “margin level.” The margin level is expressed as a percentage, reflecting the ratio of used margin to the account’s net value.

Margin level calculation formula: Margin Level = (Account Net Value ÷ Used Margin) × 100%

Where:

• Account Net Value: The actual account value after all positions are settled, including unrealized profits or losses
• Used Margin: The total margin locked in all open positions

When the margin level drops to 100%, it means your account net value is equal to or less than the used margin, and the platform will freeze your trading permissions. If the margin continues to decline to the platform’s set stop-loss level (usually 50%), the system will automatically force close positions to protect both parties’ risks.

Two real cases to understand the full process of margin call triggering

Scenario 1: From calm to trading restriction

You use a $1,000 account to buy 1 mini EUR/USD with a margin requirement of 5%.

Trade data at opening:

• Required margin: $200
• Account net value: $1,000
• Margin level: (1000 ÷ 200) × 100% = 500% (very low risk, can continue opening positions)

Later, EUR/USD fluctuates sharply, and your position incurs an unrealized loss of $800:

• New account net value: 1000 - 800 = $200
• Margin level: (200 ÷ 200) × 100% = 100% (margin call warning line)

At this moment, the margin level hits 100%, and the platform will freeze your ability to open new positions—you can no longer open new trades, only wait for the market to reverse or close positions voluntarily. If losses continue to grow and the margin level falls below the platform’s stop-loss line, the system will forcibly close positions.

Scenario 2: A deeper risk chain

Suppose you hold multiple positions in the same account, with total used margin of $400. When the account experiences larger fluctuations, and the net value drops to $300:

• Margin level: (300 ÷ 400) × 100% = 75% (already in a danger zone)

Now, if an additional floating loss of $50 occurs, bringing the net value to $250:

• Margin level: (250 ÷ 400) × 100% = 62.5%

Once the platform’s set 50% stop-loss line is reached, all positions face the risk of forced liquidation. This is the ultimate form of margin call.

Three effective strategies to avoid margin call追缴

1. Reasonably assess risk tolerance

Before opening a position, clearly define the maximum loss you can bear. Choose appropriate lot sizes and leverage multiples based on your account size, ensuring that potential losses per trade do not exceed 2%-3% of the total account. This is a fundamental principle for professional traders.

2. Strictly execute stop-loss orders

Setting stop-loss orders is the most effective tool to prevent margin calls. When opening a position, set a stop-loss point; when the price reaches the preset level, the system automatically closes the position, controlling losses within an acceptable range. Even if your prediction is wrong, you can cut losses early with minimal damage.

3. Diversify positions to reduce single risk

Distribute funds across multiple unrelated trading instruments (such as different currency pairs or markets) to avoid putting all margin into one direction. Even if one trade incurs significant losses, profits from other positions can help offset the overall account risk.

In short, understanding the concept of margin call in Chinese and establishing a comprehensive risk management system are essential survival skills for advanced traders.