Broker's call, also known as the Call loan rate, is the interest rate relative to which margin loans are quoted. Individuals may borrow on margin a part of the funds they use to buy their securities from their broker. The broker, in turn, may borrow funds from a bank (with an agreement to repay the bank immediately on call).
The broker has a base rate which is usually the Broker's call rate. The broker's rate is published daily in The Wall Street Journal and Investor's Business Daily. Depending on the amount borrowed the effective rate will have a percentage added or subtracted with the lowest rates for the most money borrowed. The dollar categories and amounts that is added or substracted varies with the broker.
When the value of the stocks drop which are acting as collateral drops to the margin call, the broker can sell any stock without notice. The percentage where a margin call occurs can vary with a broker, and with the broker's experience with the investor.
The rate paid on such loans is about 0.75 – 1.25% higher than the LIBOR. When a small amount of margin is used the percentage added to the base can be 3% or more.
However, since the September 2008 bank-run and its consequent dislocation in over-night borrowing costs (IE the effective achievable deposit rates for spare cash) the FCM's have moved away from LIBOR reference and have taken to pricing relative to each exchange's specific margin deposit rate (IE ICE is ICE deposit rate 'IDR').