A margin call in a hedge fund occurs when the value of its leveraged assets drops below the broker's required threshold, demanding additional capital or asset liquidation. This mechanism is used by prime brokers to manage risk and enforce loan agreements. While it protects lenders from default, it can force funds to sell assets at distressed prices, impacting broader markets.
Get alerts when this topic surges in newsletters. Free to start.
Sign up freeExplore more trends:Trending Topics ·AI Trends ·Business Trends ·Finance Trends ·Technology Trends