What It Means
A margin call is your broker's demand for additional funds or collateral when a leveraged position's value falls below the required maintenance margin — the minimum equity you're required to keep in the trade.
How It Works
As the price moves against a leveraged position (an MTF trade, an F&O position, anything held on borrowed capital), the value of your collateral drops with it. Once your margin falls below the required level, the broker asks you to add funds to restore it. If you don't within the window given, the broker can square off the position — often at whatever price is available, not one you'd have chosen.
Example
Priya holds an MTF position where she's required to maintain ₹15,000 in margin. The stock drops and her margin cushion falls to ₹11,000. Her broker issues a margin call for the ₹4,000 shortfall. If she doesn't add funds by the deadline, the broker squares off enough of her position to bring the account back within the required margin.
Warning
A margin call doesn't come with a generous grace period. If the shortfall isn't covered in time, the broker can force-close the position the same day, at market price, without waiting for you to react.