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- A margin call is triggered mechanically once a trader’s account equity drops below the maintenance margin level, not simply when a position turns unprofitable.
- The 2020 collapse of WTI crude oil futures showed how margin calls can force traders out of a market faster than the underlying price is even moving.
- UAE regulators and trading platforms both set firm windows for meeting a margin call, after which the position is closed automatically.
Trading in the UAE? You need to know what a margin call is and what can trigger one.
A margin call is a demand from a broker or exchange to add funds to an account. It happens when the money set aside to hold a leveraged position falls below a required minimum.
The trigger is not a losing trade on its own. It is the account’s equity falling below what the exchange calls maintenance margin.
Once that line is crossed, the trader has two choices. Deposit more funds, or close the position before the broker does it automatically.
From Falling Equity to an Automatic Stop-Out
Futures and CFD positions are opened with margin, a portion of the contract’s full value rather than the whole amount.
That is what lets a trader control a much larger position than their account balance would otherwise support.
When the market moves against the position, losses reduce the account balance as the position is marked to market.
Two thresholds matter. Initial margin is the amount required to open the position, while maintenance margin is the minimum balance that must be maintained once the trade is live. ⁽¹⁾
If the account falls below maintenance margin, the trader may receive a margin call requiring the balance to be restored to the initial margin level. In fast-moving futures markets, that additional collateral can be required within hours. If the call is not met, the broker may reduce or liquidate the position. ⁽²⁾
On many MT5-based CFD platforms used across the UAE, that floor is expressed as a margin level percentage, and the exact trigger is set by each broker’s own trading conditions rather than a single industry standard.
Equity trading carries its own version of the same rule. The UAE Capital Market Authority requires brokers to flag a margin shortfall to clients daily, and to sell the shares if the shortfall is not covered within two trading days. ⁽³⁾
The 2020 Session When Margin Calls Outran the Price
The clearest example of this mechanism at scale came from crude oil futures.
In April 2020, the May WTI contract settled at negative $37.63 a barrel. It was the first time in the contract’s history that oil futures traded below zero. ⁽⁴⁾
Traders holding long positions faced margin calls that grew larger as the price fell. Many chose to close out and accept the loss rather than keep posting additional funds.
Storage was part of the story. Commercial crude inventories at the Cushing, Oklahoma delivery point stood at about 76 percent of working storage capacity in the week leading into the crash, leaving little room to absorb the physical oil behind expiring contracts. ⁽⁵⁾
That combination, a wall of margin calls meeting a shortage of storage, turned a supply problem into a historic price collapse in a single session.
Traders looking at how crude oil futures are structured today still study that session as the clearest case of margin mechanics overwhelming a market.
Margin Hikes Can Force the Same Selling Before Any Losses Show
Margin calls are not only a symptom of stress already underway. Exchanges also raise margin requirements pre-emptively, when they judge a market has become too leveraged, and that alone can trigger the same forced selling.
It happened in precious metals in early February 2026, when CME raised gold and silver margin requirements three times in eight days, forcing leveraged gold and silver longs to either add capital or exit.
The unwind was sharp, but it cleared excess leverage that had built up over months. Forced selling, in that sense, cuts both ways. It punishes traders caught on the wrong side of a move, but it also removes the leverage that made the move violent in the first place.
