When a margin call arrives, the clock starts ticking. You generally have three ways to satisfy the call: depositing cash, depositing additional securities, or selling existing assets . Each method has a different mathematical impact on your account, and choosing the wrong one can lead to further complications.

Method 1: Depositing Cash

This is the simplest and most direct way to resolve a call. When you deposit cash, you are increasing your equity and decreasing your loan balance simultaneously.

Action: Deposit the exact amount of the margin call.
Impact: If you have a $2,000 margin call and deposit $2,000 in cash, your equity increases by $2,000, and your margin loan decreases by $2,000. This immediately brings you back into compliance .

Method 2: Depositing Marginable Securities

If you have fully paid-for stocks in another account, you can transfer them into your margin account to serve as additional collateral. However, because these new securities also have their own maintenance requirements, you must deposit more than the dollar amount of the call .

The Formula for Depositing Securities:
Value to Deposit = Margin Call Amount / (1 - Maintenance Requirement % of the new security)

Example:

Margin Call: $6,000.
The stock you want to deposit has a 40% requirement.
Calculation: $6,000 / (1 - 0.40) = $6,000 / 0.60 = $10,000.
Result: You must deposit $10,000 worth of that stock to cover a $6,000 call .

Method 3: Selling Securities

Selling assets is often the most painful way to meet a call because it usually involves selling at a loss during a market downturn. Furthermore, because selling only reduces your loan and doesn't add new equity, you have to sell a significantly larger amount of stock than the call itself .

The Formula for Selling Securities:
Value to Sell = Margin Call Amount / Maintenance Requirement % of the security being sold

Example:

Margin Call: $6,000.
The stock you are selling has a 40% requirement.
Calculation: $6,000 / 0.40 = $15,000.
Result: You must sell $15,000 worth of stock to satisfy a $6,000 call .

Comparison of Resolution Methods

Method	Amount Needed for $2,000 Call (30% Req)	Pros	Cons
Deposit Cash	$2,000	1:1 ratio; simplest.	Requires liquid cash.
Deposit Stock	$2,857	Keeps you invested.	Requires extra collateral.
Sell Stock	$6,667	No new money needed.	Massive reduction in position.

The Reality of Forced Liquidation

If you do not act quickly, the broker will act for you. It is vital to understand the "Broker's Rights" in this scenario:

No Choice of Assets: The broker can sell any security in your account, not just the one that dropped in value .
No Choice of Timing: They can sell at the market open, the market close, or any time in between .
Over-Liquidation: The broker is allowed to sell enough to completely pay off your margin loan, not just enough to meet the call .
No Notice Required: While most firms try to call or email, they are legally permitted to sell your assets without any warning if they deem the account too risky .

Strategies to Avoid the "Danger Zone"

To stay out of the margin call territory, consider these practical steps:

Leave a Buffer: Never use 100% of your buying power. Leave a "considerable cash cushion" to protect against sudden drops .
Daily Monitoring: Check your "Account Equity Percentage" daily. Most brokers provide this as a real-time balance .
Use Alerts: Set up automated alerts to notify you when your equity drops below a certain percentage or when a specific stock hits a "danger price" .
Understand Interest: Remember that margin interest is added to your loan balance monthly. Over time, this "accrued interest" increases your loan and decreases your equity, slowly pushing you closer to a call .

Summary FAQ: Resolving Margin Calls

Can I use "accrued interest" to meet a call? FINRA rules allow members to use accrued interest to reduce or eliminate a maintenance call, but it cannot be used to determine the initial equity in the account .
What is a "Federal Call"? This is a special call issued when the initial Reg T requirement (50%) is not met. It is different from a maintenance call .
How long do I have to meet a call? While "Exchange Calls" (25%) often give 48 hours and "House Calls" might give 5 days, the broker can liquidate immediately if they choose .
Does selling stock always satisfy the call? Yes, but only if you sell the correct amount. Selling $2,000 of stock to meet a $2,000 call will not work because you are also losing the collateral value of that stock .
What if I have multiple margin accounts? Brokers generally look at each account's requirements, but they may allow "cross-guarantees" where equity in one account backs another, though this involves complex calculations .