: What is a "margin-call" and how are they enforced? I was just reading up on trading, etc and found something called "margin-call". I understand it, and believe it to be that once your equity is too low, the margin call occurs

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Simplest way to answer this is that on margin, one is using borrowed assets and thus there are strings that come with doing that. Thus, if the amount of equity left gets too low, the broker has a legal obligation to close the position which can be selling purchased shares or buying back borrowed shares depending on if this is a long or short position respectively.

Investopedia has an example that they walk through as the call is where you are asked to either put in more money to the account or the position may be closed because the broker wants their money back.

What is Maintenance Margin? A maintenance margin is the required
amount of securities an investor must hold in his account if he either
purchases shares on margin, or if he sells shares short. If an
investor's margin balance falls below the set maintenance margin, the
investor would then need to contribute additional funds to the account
or liquidate stocks in the account to bring the account back to the
initial margin requirement. This request is known as a margin call.

As discussed previously, the Federal Reserve Board sets the initial
margin requirement (currently at 50%). The Federal Reserve Board also
sets the maintenance margin. The maintenance margin, the amount of
equity an investor needs to hold in his account if he buys stock on
margin or sells shares short, is 25%. Keep in mind, however, that this
25% level is the minimum level set, brokerage firms can increase, but
not decrease this level as they desire.

Example: Determining when a margin call would occur. Assume that an
investor had purchased 500 shares of Newco's stock. The shares were
trading at when the transaction was executed. The initial margin
requirement on the account was 70% and the maintenance margin is 30%.
Assume no transaction costs. Determine the price at which the investor
will receive a margin call.

Answer: Calculate the price as follows:

(1- 0.70) = .43 1 - 0.30

A margin call would be received when the price of Newco's stock fell
below .43 per share. At that time, the investor would either need
to deposit additional funds or liquidate shares to satisfy the initial
margin requirement.

Most people don't want "Margin Calls" but stocks may move in unexpected ways and this is where there are mechanisms to limit losses, especially for the brokerage firm that wants to make as much money as possible.

Cancel what trade? No, the broker will close the position if the requirement isn't kept. Basically think of this as a way for the broker to get their money back if necessary while following federal rules. This would be selling in a long position or buying in a short sale situation.

The Margin Investor walks through an example where an e-mail would be sent and if the requirement isn't met then the position gets exited as per the law.

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If you don't have a margin account, then you will not have margin calls.

You need a margin account if you wish to "buy on margin", to sell stocks "short", or to sell options, or maybe some other esoteric things I have not thought of. If you don't do those things, then you do not need a margin account and will not get margin calls.

In your example, it doesn't sound like margin has been used, If you deposit and used it to buy of stock and it then falls to , "they" did not lose the money, you did. But if no margin was used, then no margin call would result.