It has been reported that Kevin Spacey and Zachary Quinto are attached to star in Margin Call. The film “tracks eight people at a prominent investment bank in a tumultuous 24-hour period during the early stages of the financial crisis. The characters struggle to position themselves ahead of the coming storm.” This will mark the directorial debut of writer J.C. Chandor.

While there has been little revealed about the plot, as this story just recently as the project is shopping for distribution at the Cannes market, we can speculate a little about the title, explaining what a “margin call” is.

The process begins when an individual (or firm) buys on margin (taking out a partial loan) to cover a larger investment. For instance, if you want to purchase $100k of a new hot stock, but only have $50k to invest, you can borrow the remaining $50k from your broker (to be repaid later with interest). This ratio is important to keep in mind, as whether the value of a stock goes up or down, most brokers have a minimum margin requirement, in which a certain percentage (let’s say 30%) of the investment must be in direct equity (your own money). If the value of the stock increases, this ratio increases in your favor, and you can make a lot of money.

However, buying on margin is usually a fairly risky proposition, and in the case of a financial crisis, it can have devastating consequences. For instance, if the stock you own drops in value to $75k, your equity would be reduced to $25k ($75k – $50k loan), which would put you dangerously close to the broker’s minimum margin requirement (30% of $75k is $22,500). If the stock drops any lower, the broker would put out a margin call to the individual or firm, requesting more funds for the account. At that point, the individual can make up this difference by selling some of the stocks, or by taking out additional loans. However, there is no guarantee that the stock will turn around. In times of financial crisis, things go from bad to worse, and people can lose everything.

The fact that this story is described as tracking eight people gives me the impression that we’re going to see this moment happen from multiple perspectives, perhaps from the young broker who watches all of his accounts plummet to the mature father who discovers he’s lost his family’s financial safety net. This is all speculation, but we can hope for an encompassing view that humanizes such a crisis.

The film is set to go in front of cameras this summer in Manhattan. Until then, we will wait and see.

What stories would you like to see portrayed in this film?

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