Margin Call

The request by a broker or bullion dealer for additional funds to cover forward or futures contracts if the price moves against the client. Margin calls can be crucial to holders of large positions if there is a big swing against them, because they may suddenly be required to post substantial additional amounts of cash within a matter of hours that may not be available to them. The failure to meet such margin calls can lead to the immediate liquidation of the position. Margin calls can also prove difficult for central banks that may have entered into large forward positions with bullion dealers, against foreign exchange and may also suddenly be liable to put up more margin in gold itself if the price fails to maintain the foreign exchange facility.