What is a broker's call?

The broker's call, also known as the call loan rate, is the interest rate charged by banks on loans made to brokerage firms. These brokers then use these loans, called call loans, to provide leverage to traders using margin accounts. As their name suggests, call loans must be repaid immediately—or "on call"—if so requested by the bank.

What is a broker call rate?

But, in terms of a broker call rate, that is only referring to the interest rates that brokerages pay to banks, not the margin rates traders pay to brokerages for their margin accounts. In addition, although the broker call rate is quoted as an annual rate, these loans are typically for much shorter periods of time.

Why is a broker's call important?

Understanding the importance of broker’s calls is vital for making informed investment decisions. What is a Broker’s Call? A broker’s call, also known as margin call, is a demand from a brokerage firm to an investor, requiring additional funds or securities to be deposited into their account.