A margin call is a notification from the trading platform that an account no longer has enough available margin to maintain its open positions. It happens when the market moves against open trades and the losses reduce account equity below the minimum margin required to keep those positions open. If margin is not restored, the platform typically closes some or all open trades automatically to bring the account back into acceptable margin territory.

In retail trading, a margin call often means the trader needs to deposit more funds to maintain positions. In a prop firm context, that option is not available. The account balance is what the firm allocated, and traders cannot add capital to it. When margin runs low on a funded account, the platform’s stop-out level takes over, closing positions to protect the remaining balance. The stop-out level is typically set at a specific percentage of margin usage, often around 50%.

The most reliable way to avoid a margin call is conservative position sizing paired with stop losses on every trade. Because margin calls in a prop firm environment trigger automatic position closures, they can also trip daily loss limits or maximum drawdown breaches depending on how the losses affect the account.