A margin call is a formal notification from a broker, exchange, or lending platform that your account equity has fallen below the required maintenance margin. In other words, the value of your collateral no longer sufficiently supports your borrowed funds or leveraged position, so you must restore the required buffer.
How a margin call happens in crypto
In crypto margin trading or futures trading, you open a leveraged position by posting margin (collateral) and borrowing additional exposure. Platforms track your account equity, typically your collateral value plus unrealized profit and loss, against a maintenance margin requirement. If the market moves against you, losses reduce your equity. If your equity drops under the maintenance threshold, the platform issues a margin call, warning that your position is at risk.
For example, a trader who uses leverage to go long an asset may receive a margin call after a sharp decline reduces their equity. The platform is signaling that the position no longer has enough margin to safely remain open.
What you can do after receiving one
A margin call usually gives you a choice: add more collateral, reduce exposure by closing part of the position, or accept that the platform may close positions automatically. In many crypto venues, margin calls can escalate quickly into liquidation if the account continues to deteriorate or if the platform’s rules require automatic risk reduction. Similar mechanics exist in crypto lending, where a borrower may be asked to add collateral when their collateralization ratio falls below a required level.
Why margin calls matter
Margin calls are a core risk control in the crypto ecosystem because they limit counterparty risk for exchanges and lenders, and they remind traders that leverage amplifies both gains and losses. Understanding maintenance margin and margin calls helps users manage volatility, avoid forced liquidations, and size positions responsibly.