A man purchased 100 shares of a $100 stock on a 50% margin two months ago (meaning he paid $5000 initially, and owes another $5000 to his broker). Since then the stock's value has decreased to $90 a share. Since a 50% margin is the maximum allowable by most brokerages, the man receives a margin call from his broker. The broker tells the investor he needs to put another $1000 into the equity to bring it back up to its minimum maintenance margin of 50%. If the investor are unable to do this in a timely manner, the broker will have the right to sell whatever stocks/equity assets of the investor's his brokerage controls to bring the investor's account up to its minimum required margin (and in most cases without needing to consult the investor himself).
