Margin Call
What Happens When Free XAUUSD Trading Margin is Negative?
A margin call is when a gold trader's account free margin goes below the required margin level that's set by the broker. This means that because the free margin in the trader's account has gone below the required margin level then the trader gets a margin call & some of the open trades in gold trader's are closed by the broker until this margin percentage level goes back up above the required margin percent area.
Some of the open trades may be closed or all of the open trades might be closed if this margin call is automatically executed by the broker.
What's Gold Trading Margin Requirement Level?
Now if Your XAUUSD Leverage is 100:1
When trading if you have $1,000 and use leverage of 100:1 and buy 1 standard gold lot for $100,000 your margin on this gold trade is the $1000 dollars in your gold account, this is the money that you will lose is your open gold trade goes against you the other $99,000 that's borrowed, the broker will close out the open trades automatically using a Margin Call once your $1,000 has been taken by the xauusd trading market.
But this is if your gold broker has set 0% Gold Margin Requirement before closing your xauusd trades automatically using this Margin Call.
What's 20% Gold Margin Requirement Level?
For 20% margin requirement before closing your xauusd trades automatically using a Margin Call, then your gold trade transactions will be closed once your gold trading account balance gets to $200 - at $200 you'll get a margin call.
What is 50% Gold Margin Requirement Level?
For 50% requirement of this level before closing your xauusd trades automatically using a margin call, then your transactions will be closed once your account balance gets to $500 - at $500 you will get a margin call.
What is 100% Gold Margin Requirement Level?
If the broker sets 100% margin requirement of this level before closing your open positions automatically using a Margin Call - at $1,000 you will get a margin call, then your xauusd trades will be closed once your account balance gets to $1,000: Meaning the xauusd trades will close-out as soon as you execute a 1 standard gold lot on this xauusd account because even if you as a trader you pay 10 dollars spread your gold trading account balance will get to $990 & the needed margin requirement percent is 100% that is 1,000 dollars, therefore your gold orders will immediately get closed using a Margin Call once your margin requirement falls below 100%.
Most gold brokers do not set 100% margin requirement, but there are those gold brokers that set their margin requirement level at 100 percent trading margin aren't suitable for you at all, even those who set 50% trading margin requirement level are still not suitable. Select those trading brokers set their margin level requirement a 20% margin requirement, in fact, those xauusd brokers which set their margin requirement at 20% Gold Trading Margin Requirement are some of the best because the likely hood they close-out your trade using a Margin Call is reduced as shown in the examples above.
To Know More about XAUUSD Leverage & Margin - Read the Learn Gold Topics Below:
XAUUSD Leverage & Margin Tutorial
