3. using too much borrowed money, or excessive leverage, makes one more likely to face margin calls.
3. using too much borrowed money, or excessive leverage, makes one more likely to face margin calls. It means the more leveraged an individual is, the more massive his loss if the trend turns against him.
How to Avoid a Margin Call?
Although margin calls are part and parcel of trading on the margin, there are several steps you can take to decrease your chances of receiving a margin call:-