An adviser reached out yesterday telling me that Schwab, their tax-aware long/short separate account custodian, issued a margin call in two client accounts earlier this week
Margin calls are typically risk-related. The scenario most folks have in mind is when a portfolio's collateral has degraded enough to warrant putting up more.
But portfolio performance had been solid, making some wonder if the words "margin call" even made sense here.
Schwab had recently clarified that a long/short portfolio with debit/credit ratio greater than 110% could trigger a margin call, though most folks didn't give it much thought at the time.
Perhaps that had something to do with it?