Large jump in margin calls

Recent falls in stocks such as AMP, Telstra and the banks resulted in a large increase in the number of margin calls made during the March quarter, according to the Reserve Bank. Margin call totals were up 68 per cent in the quarter to 44,000, the second-highest number since the September 2001 quarter.

Leveraged Equities said, however, there are still plenty of borrowers opening loans, but just not drawing down on them. A margin call occurs on a loan taken out to buy shares when an investor's borrowing level falls below an agreed minimum. The borrower then has to top up the loan with cash or sell shares.

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