If the value of your portfolio drops, your account can approach a required maintenance call.
If your account value drops so that your equity value is below our maintenance threshold, M1 will issue a maintenance call. The maintenance threshold is normally 30% of your account value but M1 may impose additional restrictions based on risk of securities held or portfolio concentration.
As an example, if your portfolio is originally $10,000 in equity and then you borrow $3,500, your account's total value would be $13,500. The equity percentage would be 74% in this case ($10,000/$13,500).
If your account loses value and your equity makes up less than 30% of your overall account value then there would be a margin call. The margin call is subject to be higher if you are invested in more risky securities like leveraged ETFs or highly volatile stocks. You can always see your current margin status on the borrow page.
When a maintenance call is issued for your account, you will either need to deposit additional cash or sell a portion of your portfolio to resolve the maintenance call. Clicking "Learn More" > "Resolve Call" will redirect you to a screen where you will be presented with those options.
1) Depositing Additional Funds: Clicking "Deposit Funds" will redirect you to the Transfers tab where you will be able to make a deposit to cover the margin call. Please note that Auto-Invest will need to be turned off in order to ensure that the deposited funds are not automatically invested.
2) Selling Securities: If you want to sell securities in order to resolve the maintenance call, click "View Holdings." You will be redirected to your holdings, listed from highest maintenance requirement to the lowest. Clicking on a holding will redirect you to "Position Details," where you can then choose to Sell that security. Please note that Auto-Invest will need to be turned off before securities can be sold.
Please read all additional maintenance disclosures here: Margin Disclosures.
Using margin involves risks: you can lose more than you deposit, you are subject to a margin call, and interest rates may change. To learn more about the risks associated with margin loans, please see our Margin Disclosure. M1 Borrow available on margin accounts with a balance of at least $10,000. Does not apply to retirement accounts.