August 27, 2015

Margin Calls Bite Investors, Banks

By Michael Wursthorn & AnnaMaria Andriotis


Excerpt –

Wursthorn and Andriotis explore how some lenders are issuing margin calls to investment clients as global markets have decreased in value, forcing investors to chose between adding funds to their accounts or selling some of the securities underlying the loans.

Schindler suggested that clients should not over-leverage or maximize loans beyond 50% of the value of their accounts to minimize the risk of a margin call. “When you stick to borrowing lower numbers it would take a significant drop for this to occur, ”said Schindler.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice. 2015-11277