Margin and

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Margin and Leverages

 

About Margin

Margin is a term used in the financial world to indicate a guarantee that must be placed by the holder of a position (sell or buy) in securities trading, options, or futures contracts to protect the credit risk of counterparty partners.

Margin is expressed as a presentation of a position size (eg 5% or 1%) and the only reason to have funds on your trading account to ensure sufficient margin. With a 1% margin, for example for a $ 1 000 000 position you only need a deposit of $ 10 000. Margin Call at 50% and Stop Out at 30%.

Leverage up to 1: 200

The use of leverage allows you to trade in a position larger than the amount of funds you have on your account. Leverage is expressed as a ratio, for example 50: 1, 100: 1, or 200: 1. In the world of finance and forex, leverage refers to the use of various financial instruments or loan funds to increase the potential return on an investment. The existence of this leverage is what makes more traders can take part, not only those who have large funds, because leverage makes the capital requirements to participate in forex trading becomes smaller.

Leverage Risk

On the one hand, using leverage, you can make a considerable profit from your relatively small initial investment. On the other hand, you can also experience losses drastically if you do not apply appropriate risk management.

Margin Call

Once your equity drops below 50% of the margin required to maintain your trading position, we will try to notify you with a margin call warning that you do not have enough capital to support your trading position.

Stop-Out level

Stop-out level refers to the level of equity when your open trading position can be automatically closed.