Can somebody explain the phrase in bold for me, please? According to this source https://www.investopedia.com/terms/m/margincall.asp

A margin call refers specifically to a broker's demand that an investor deposit additional money or securities into the account so that it is brought up to the minimum value, known as the maintenance margin.

From Fortune magazine

Latam Airlines Group, Latin America’s largest carrier, whose shareholders include Chile’s Cueto family, sought bankruptcy court protection in New York. In March, Neeleman—who founded companies including JetBlue and Canada’s WestJet Airlines—unloaded more than 80% of his preferred shares in Brazilian carrier Azul SA after a margin call was triggered on a $30 million personal loan.

Source: For billionaires, investing in airlines is becoming a losing bet

  • @Davo The question clearly shows effort, and research–see the link explaining "margin call"–but I do not understand why isolating a sentence fragment is a valid reason for closing. Could you please explain?
    – Mari-Lou A
    Jul 19 '20 at 10:24
  • Not understanding the meaning is exactly the reason why it was split incorrectly, and we can’t refuse a question because the person asking doesn’t know the answer.
    – gnasher729
    Jul 19 '20 at 12:54

The meaning of trigger is this (Lexico):

Cause (an event or situation) to happen or exist.

The word trigger applies especially in cases where an action is sudden and complete, and happens because of a small change.

Brokerage companies sometimes allow investors to purchase stocks with borrowed money. This is referred to as buying on margin. Investors do this if they expect stock prices to rise, hoping to sell the stocks for more than the borrowed amount, and so making money. Brokers require a minimum cash security to purchase the stock, and provide the money for the rest of the purchase as a loan. The stock is then held as security for the loan.

If the value of the stock falls, instead of rising, the cash that secures the investment will be less than that percentage, and the investor will have to provide more cash to maintain the required percentage. When that happens, there is a margin call. If the investor can't or doesn't provide the extra cash, the broker will sell the stock to protect itself.

When there is a margin call, it can be said to be triggered, in the sense of the definition above.

The article above mentions a "personal loan", rather than a brokerage, but it seems to mean that stock was pledged as security for that loan, and its fall in value was the trigger for the margin call.

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