A demand to post more collateral when the value of a position moves against the holder. Failure to meet it can lead to close-out.
Where you will meet it
Margin call comes up in 7 learning outcome notes across the FRM syllabus.
A few of them:
Exchanges and OTC Markets FRM Part I · Financial markets and products
“Once it falls below maintenance, a margin call requires a deposit that restores the balance to the initial margin, not merely to the maintenance level.”
Margin (Collateral) and Settlement FRM Part II · Credit risk measurement and management
“Exposure can still grow during the margin period of risk, which is the time from the last successful margin call to close-out.”
Exchanges and OTC Markets FRM Part I · Financial markets and products
“When the ratio falls below the maintenance margin, often 25% to 30%, a margin call follows.”
Futures Markets FRM Part I · Financial markets and products
“If the balance drops below the maintenance level, a margin call requires a deposit of variation margin that restores the account to the initial margin level, not just to maintenance.”
GARP does not endorse, promote, review, or warrant the accuracy of the products or services offered by Charta Learning, nor does it endorse any pass rates claimed by Charta Learning. Further, GARP is not responsible for any fees or costs paid by the user to Charta Learning. FRM® and GARP® are registered trademarks owned by the Global Association of Risk Professionals, Inc. The questions, explanations and study notes are written for this product and are not GARP curriculum material.