Investing Simple Logo
Menu
Get 1 Free Stock Worth Up To $200 From Robinhood!
Sign up with Robinhood, deposit any amount and get 1 Free Stock. It takes less than 3 minutes to sign up and claim your Free Stock Bonus.
Earn 5.00% APY with M1 High-Yield Savings Account
M1 Plus members can earn 5.00% APY on their deposits with no minimum balance required.
Webull free stock promotion
Get Up To 5 Free Stocks From Webull
Open a new Webull brokerage account today and deposit any amount of money to receive 5 free stocks. Webull offers commission free stock, ETF, option and crypto trading.
Written by Sam Pennington on February 17, 2023
Category: 
FTC Disclosure: Some of the links on this site are affiliate links. Read our full disclaimer here.

TD Ameritrade Margin Calls Explained

Margin trading is a popular strategy used by investors to amplify their gains in the stock market. However, it comes with significant risk. Investors ought to be aware of the potential for margin calls.

A margin call occurs when an investor's account value falls below the minimum margin requirement set by the broker. In this article, we will take a look at how a margin call is handled with the TD Ameritrade platform.

TD Ameritrade Margin Account

TD Ameritrade requires investors who wish to trade on margin to have a minimum account balance of $2,000 and a margin account. The margin account allows investors to borrow money from TD Ameritrade to purchase securities, with the borrowed money serving as collateral for the loan.

What is a Margin Call?

When an investor's account value falls below the minimum margin requirement, TD Ameritrade will issue a margin call. A margin call is a request for the investor to deposit additional funds into their account to bring it back above the minimum margin requirement. If the investor fails to do so, TD Ameritrade may sell securities in the account to raise the necessary funds.

TD Ameritrade provides several options for investors who receive a margin call. In fact, there are three options investors can take:

  • The first option is to deposit additional funds into the account to meet the margin call. This is the most straightforward option, and it allows investors to maintain their existing positions and potentially avoid selling securities at a loss.
  • The second option is to sell securities in the account to raise the necessary funds. This can be a difficult decision, as selling securities at a loss can be a challenging pill to swallow. However, it may be necessary to meet the margin call and avoid further losses.
  • The third option is to request a margin increase. A margin increase allows the investor to borrow more money from TD Ameritrade to purchase additional securities. This can be a risky option, as it increases the potential for losses in the event of a market downturn. However, it may be a viable option for investors who are confident in their investment strategy and wish to increase their exposure to the market.

TD Ameritrade also provides resources for investors to manage their margin accounts and avoid margin calls. These resources include margin calculators, risk management tools, and educational materials to help investors better understand the risks associated with margin trading.

Final Thoughts

Margin investing is typically recommended for more advanced investors. However, anyone can get started. With that in mind, investors should be aware of the potential for margin calls. Margin calls can be stressful and may require difficult decisions, but by staying informed and managing risk appropriately, investors can work towards achieving their investment goals.

In conclusion, TD Ameritrade handles margin calls in a straightforward and transparent manner. Investors who receive a margin call have several options available to them, including depositing additional funds, selling securities, or requesting a margin increase. TD Ameritrade also provides resources to help investors manage their margin accounts and avoid margin calls. By staying informed and managing risk appropriately, investors can work towards achieving their long-term investment goals.

Don't forget to grab your free stock worth up to $200 from Robinhood today!

Article written by Sam Pennington
Sam is a personal finance writer. While in college, he dedicated his spare time to learning about personal finance, investing, and real estate. Sam currently works as a business analyst for one of the top food manufacturers in the world.

Read more

Power Your Investing

Choosing the right product and service is essential for your investing. Here are some of the tools and services to help your portfolio grow.
Robinhood
Robinhood provides an easy-to-use free trading platform for beginner investors. Robinhood has $0 account minimums. Get a free stock when you open an account below.
Try Robinhood
M1 Finance
M1 Finance offers a free investing platform where users can build portfolios of stocks and ETFs. Users can also choose from a variety of pre-built portfolios offered for free.
Try M1 Finance
Fundrise
Passively invest in private real estate deals with as little as $10. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
Try Fundrise
Copyright © 2018 – 2023 Investing Simple LLC. All Rights Reserved.
Investing Simple is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. Investing Simple has advertising relationships with some of the offers listed on this website. The information on Investing Simple could be different from what you find when visiting a third-party website. All products are presented without warranty. For more information, please read our full disclaimer.
Website managed by Stallion Cognitive™
magnifiermenuchevron-downcross-circlechevron-down-circle

Get 1 Free Stock Worth Up To $200 From Robinhood!

Don't Miss This Opportunity!

Investing Simple readers can claim a free stock from Robinhood worth up to $200 when they open a brokerage account and deposit any amount.

For US Residents only. Investing Simple is affiliated with Robinhood, and we may earn a commission when you sign up for Robinhood.

18749
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram