A margin call comes when borrowed positions fall below the required collateral. The holder must add cash or sell, and if they don't, the broker can sell for them. Borrowed money magnifies both gains and losses.
What the video says
In hedge funds, you can be right about a stock, and still be forced out. The reason is the margin call. Say you buy a hundred million of stock. Twenty is yours. Eighty is borrowed. The broker wants at least ten million of yours left in it. The stock falls fifteen percent. You've lost fifteen million. Your twenty is five. That's under the floor. The call comes. Add cash, or sell. No cash? The broker can sell it for you, at that low price. And that selling can set off other margin calls. Then the stock comes back, to a hundred and twenty. You'd have had forty. You're already gone. So why do investors care? Borrowing magnifies gains and losses. And the lender decides how long you get to wait. Being right later doesn't help if you're out now.
In the glossary: Margin call
A simple example with round numbers, not advice. Terms vary by fund.
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