Trade Gold Trading

What Happens When Free Gold Margin Hits and Gets To Zero?

What Happens When Free Margin in Your Trade Account is Negative?

A margin call is when a xauusd trader's account free margin drops and falls below the required margin level that's set by broker. This means because free margin in trader's account has dropped below the required margin level then trader receives a margin call & some of the open trade transactions on the trader's are closed by broker til this margin level goes back up to above required margin level.

Some of the open trade transactions may & might be stopped out or all of the open trade transactions may be stopped out if this margin call is automatically executed by broker.

What's Gold Margin Requirements Level?

Now if Your Leverage is 100:1

When trading if you have $1,000 and use leverage option of 100:1 & open a buy of 1 standard lot for $100,000, then your margin on this trade transaction is the $1000 in your xauusd account, this is the money that you will lose out if your open trade position goes against you & the other $99,000 dollars that's borrowed, the broker will close-out the open trade transactions mechanically using a Trading Margin Call once your $1,000 has been taken out by market.

But this is if your broker has set 0 percent Gold Margin Requirements before stopping out your trade positions mechanically using this Trading Margin Call.

What is 20 percent Margin Requirements Level?

For 20 % margin requirement before stopping out your trade positions mechanically using a Margin Call, then your gold trade positions will be closed once your account balance gets to $200- at $200 you'll get and receive a margin call.

What is 50 % Margin Requirements Level?

For 50 % requirement of this level before liquidating your trade positions mechanically using what is known as margin call, then your trade transactions will be stopped out once your trading account balance reaches $500 - at $500 you will get and receive a margin call.

What is 100 % Margin Requirements Level?

If the online broker sets 100 % margin requirement of this level before liquidating your open trade transactions mechanically using a Trading Margin Call - at $1,000 you'll get and receive a margin call, then your gold trade positions will be closed once your account balance reaches $1,000: Explanation the trade positions will close and stop out as soon as you execute a 1 standard contract on this account because even if you as a trader you pay $10 dollars spread your account balance will get to $990 & the needed margin requirement percent is 100 % that's $1,000, therefore your orders will immediately get stopped out using a Trading Margin Call once your margin requirement falls below 100%.

Most brokers do not set 100 % margin requirement, but there are those brokers that set 100 % margin are not good for you at all, even those who set 50% margin requirement are still not good. Choose those set 20 % margin requirements, in fact, those xauusd brokers that set their margin requirement at 20% XAUUSD Gold Margin Requirement are among some of the best because the likely hood that they close-out your trade position using a Margin Call is reduced and minimized like as displayed and shown in the above example illustration.

To Learn More about Leverage & Margin - Study the Learn Guides Described Below:

Leverage and Margin Illustrated

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