What is a margin call? What happens when a leveraged trade goes wrong
By SendPay Business · · 2 min read
- 1Add your photo ID
- 2Add proof of address
- 3Checked and verified
When you trade with leverage, you only put down part of the trade's value, called margin. A margin call is the warning a broker gives when losses eat into that margin: add more money, or the broker may close your trades.
A simple example
You open a £10,000 currency trade with 30 to 1 leverage, so you put down about £333 of margin. If the price moves against you by around 1.7%, the loss is about £167, half your margin. At that point a UK broker must start closing your positions for a retail account, even if you think the price will recover.
What happens next
- The broker warns you that your margin is running low.
- You can add money or close some trades yourself.
- If your margin falls to the close-out level, the broker closes trades automatically.
- Any loss is taken from your account balance.
Try it
Name your platform and watch it come to life
Type a name, tap a colour and pick what it does. The phone changes as you go.
Colour
What it does
Design and preview your whole platform free, then launch when you are ready.
UK protections
FCA rules for retail CFD and spread-betting clients include a margin close-out at 50% of the required margin, and negative balance protection, so you can't lose more than the money in your account. Leverage still means losses can arrive fast.
Where SendPay fits
SendPay doesn't offer leveraged trading, CFDs or margin accounts. SendPay platforms let customers hold and exchange GBP, EUR and USD, and buy, sell and hold crypto without leverage, with assets held by regulated partners.
How it works
Your own money app- 1Name it and pick your colours
- 2Choose what it does
- 3Launch when you are ready
Why sign up
Create your free SendPay account
It's all about creating your own financial platform with ease. Start with a free account today.
- 🪪A free business accountOpen it in about a minute with your business name, email, password and mobile. No card and no documents to start.
- 💳Get paid from day oneTake card payments, and share your own payment link and invoices so customers pay in a click.
- 🌐A free business websiteFree to build, free to publish and free to keep, with unlimited visits.
- 🚀Your own financial platformDesign and preview your whole platform free, then launch when you are ready.
SendPay Business is a technology company, not a bank. Accounts, cards and payments are powered by licensed partners.
Questions people ask
What does funding cost on a perpetual future?
Work out funding payments on a long or short over the time you hold it.
Funding rate calculator →What gain would win back a loss?
See the percentage gain needed to recover from any drawdown.
Drawdown recovery calculator →How close am I to a margin close-out?
Work out your margin level and how much more loss your account can take.
Margin level calculator →Where would my position be liquidated?
Our free liquidation price calculator estimates the price where a leveraged long or short would be closed.
Liquidation price calculator →Read next
Spotted a mistake or something out of date? and we'll fix it. How our guides are made
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.