Reply To: Automatically closing out positions

Day Trading Community Broker Questions Automatically closing out positions Reply To: Automatically closing out positions

James Barra
Moderator Team

    Hi Danny,

    Thank you for your message.

    Can you provide more details about the circumstances?

    Brokers can start closing out your positions in certain situations. For example, if you’re trading on margin, that is trading with borrowed funds, you normally have to maintain a minimum margin requirement that’s a percentage of the total value of your positions.

    If the markets move against you and the value of your securities falls, your account may drop below the margin requirement. At which point, your broker will issue a margin call asking you to deposit more funds to return to this level.

    If you don’t meet the margin call within the timeline your broker can close out your positions to meet the shortfall.

    Brokers should make clear any margin requirements when you open an account, and you should have been sufficiently alerted that this could happen.

    If you can provide more specific details about your situation it will help us in assisting you.