The second scenario in which a broker can sell stocks without your permission occurs when they are making a margin call. Buying a stock on ‘margin’ means that you borrowed from your broker to make the transaction. Under securities industry regulations, and the internal policies of individual brokerage firms, investors must meet the minimum maintenance margin threshold at all times. If your equity in a position falls below the required amount, then your brokerage firm has the right to sell your securities. If you are purchasing stock on margin, it is imperative that you have an in-depth understanding of your brokerage firm’s margin agreement. You do not want to be caught by surprise. Make sure that you understand exactly what will happen in every situation. Remember, buying on margin is risky: it is not suitable for all investors.