What Happens if You Get a Gold Trading Margin Call?
A margin call occurs 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 and some of the open trades or all of the open trades in the trader's are closed by the broker until this account margin requirement level goes back up to a region above the required margin percent level.
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 XAUUSD Trading Margin Requirement Level?
Now if Your Gold Trading Leverage is 100:1
When trading if you have $1,000 & use gold leverage option of 100:1 & buy 1 standard lot for $100,000 your margin on this trade is the $1000 dollars in your xauusd account, this is the money that you will lose if your open trade goes against you the other $99,000 that is borrowed, the broker will close the open gold trades automatically using a Gold Margin Call once your $1,000 has been taken by the xauusd 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 trades will be closed once your 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 percentage level requirement of this level before automatically closing your open trade positions automatically using what is known as 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 lot on this gold account because even if you as a trader you pay 10 dollars spread your gold account balance will get to below $1,000 and the needed margin requirement percent is 100% i.e. 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 100% margin percent level requirement are not suitable for you at all, even those that set 50% trading margin requirement level are still not suitable. Choose those xauusd brokers that set their margin level requirement at 20% trading margin level, 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 Gold Margin Call is reduced as shown in the example above.
To Know More about Gold Leverage & Margin - Read the Topics Below:
Gold Leverage & Margin Lesson
