A margin account that no longer meets minimum maintenance requirements, requiring a margin call on the investor.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A margin account in which the value of the assets purchased on margin falls below the maintenance requirement on the account. A margin account holder is required to maintain money or securities worth a certain amount in order to continue trading on margin; this rule exists to protect the broker from financing excessive and irresponsible trading. An undermargined account may result in a margin call or in the account becoming restricted.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved