When you receive a margin call from your CFD broker, it means that the funds in your trading account have been depleted and additional funds are required to be deposited with your CFD provider to meet your margin requirements. You may receive margin calls if you suffered from a series of trading losses, or if the underlying reference security or instrument has moved adversely and dramatically against your position.
A margin, with respect to trading contracts for difference (CFDs), is the amount of financial security (i.e. money) that the CFD broker requires you to have with their accounts in order to enter in CFD trades. The margin works by calculating a percentage of the underlying reference security which you must keep in your trading account.
There are a lot of advantages with trading CFDs. Another advantage is the low fees compared with normal trading. However, don’t be caught out by the “low fee” marketing catch cry of the CFD providers. These people are in it to make money, and just like when you abuse credit cards, you too can let your trading account leak money if you aren’t aware of the fees and charges payable when trading CFDs.
Over the Counter or OTC with respect to CFDs (Contracts for Difference) means that when you trade a CFD with your CFD broker, the trade is not made over an exchange or market. The transaction or contract of the CFD exists only between you and your CFD dealer and not with any underlying exchange. Therefore you are not protected by laws which usually apply when trading on a government regulated market.