How to Meet a Margin Call on Scottrade
Scottrade, like other stock brokers, allows you to buy stock and borrow part of the purchase price. This is called buying on margin. For Scottrade, if the equity in your account falls below 35 percent, or $2,000, the broker will issue a margin call to add more money to the account. The investor's equity is his account value minus the amount of the outstanding margin loan. You need to act quickly if you receive notice of a margin call from Scottrade.
Other People Are Reading
Instructions
-
-
1
Call Scottrade immediately to confirm that you have received the margin call and to verify the amount of money needed to meet the margin requirements. Margin calls may come by mail, email or over the phone. It is important to acknowledge the margin call with Scottrade as soon as possible to avoid the broker taking action without your knowledge or input.
-
2
Decide whether to add money to the account to meet the margin requirements or to sell securities to reduce the amount of the margin loan. The decision should be partly based on the amount of the margin call and what you think about the future prospects of the securities in your Scottrade margin account.
-
-
3
Wire the funds to meet the margin requirement to Scottrade or enter sell orders for the selected securities. Wiring money is the fastest way to get money into your account. Wire instructions for Scottrade are linked below. Ensure that your account name and account number are included in the wire details.
-
1
Tips & Warnings
Scottrade has a minimum equity requirement of 35 percent for margin accounts. Monitor your account and add money or sell securities before your are pressured by a margin call.
Scottrade has local offices in many cities. You can also take a check to a local office to meet a margin call.
Buying stocks on margin can result in losses greater than your total investment.
If you fail to send money to meet a margin requirement, Scottrade can sell securities from your account to reduce the margin loan. They are allowed to sell any securities they wish.
In fast moving market conditions, Scottrade reserves the right to sell securities in your margin account without first notifying you of a margin call. It is the investor's responsibility to keep track of the values of equity and margin loan in the account.
