What it is
When margin collateral falls short or an unsettled purchase is not paid by settlement, the broker sells the client's shares to recover its money.
How
Orders are typically placed in the next opening auction at low prices likely to fill, so shares can be sold well below the prior price.
What to keep in mind
A flood of forced sales in a crash pushes prices lower in a vicious cycle. Leveraged traders should monitor collateral ratios and settlement dates.
This explanation is general information, not investment advice. Rules reflect September 2026 and may change; check official exchange and broker notices.