When is a margin call issued?

I wondered when a margin call is issued by C2. Is that when the amount shown under "margined" becomes larger than the equity in the account? Or when "buying power" becomes negative? Will all positions be closed in that case? Will this be recognized by auto trading software?


When Buying Power becomes negative, you will receive an email warning that positions will be closed automatically within 60 minutes unless you close positions yourself. Any position-closings issued by C2 to meet the margin call will also show up in any autotrading software following the system.

Then why are Hawk-fx positions still open? It has been showing a negative buying power now for several hours.

The system refused to issue a margin call because it erroneously thought the forex markets were closed due to the national day of mourning here in the U.S. Which is silly, of course. I have corrected this problem, and I believe a margin call is now being issued.


Matthew, can you please explain more about when buying power become negative at C2? I know that in my IB accounts when I use 2x margin, positions are not automatically closed until about 4x leverage is reached. What happens at C2 when full 2x margin is used to open positions, and then the account as a whole looses value?


At C2, you get a max of 2x leverage (for stocks and ETFs) and once your buying power (cash minus plus long equity minus borrowed amount/margin used) goes negative, C2 will send you a warning email and give you a chance to close positions. If you don’t do so, it will close positions at market, starting with the largest (from a margin-use perspective) first.

You should really never have this happen. If you do, it’s a sign that you are trading with way too much leverage.

Matthew, the Federal Reserve Board sets a maximum initial margin at 50% and a maintenance margin of at least 25%. If I understand you corectly, you are saying that at C2 the maintenance margin is equal to the initial margin. Correct?