Trade Gold Trading

What Happens When Free Margin Hits Zero?

What Happens When Free Margin is Negative?

A margin call is when a trader's trading account free trading margin goes below the required margin level that's set by the online broker. This means that because the free trading margin in the trader's account has gone below the required margin level then the trader gets a trading margin call and some of the open trades in gold trader's are closed by the online broker until this margin level goes back up to above the required gold trading margin level.

Some of the open trades might be closed out or all of the open trades might be liquidated if this trading margin call is automatically executed by the online broker.

What's Margin Requirement Level?

Now if Your Leverage is 100:1

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

But this is if your broker has set 0 % Margin Requirement before stopping outliquidating your trades transactions automatically using the Margin Call.

What is 20 % Margin Requirement Level?

For 20% gold trading margin requirement before liquidating your trades automatically using what is known as Margin Call, then your trades will be stopped out once your trading account balance reaches $200 - at $200 you will get a trading margin call.

What is 50% Margin Requirement Level?

For 50% requisite of this level before closing out your trades automatically using what's referred to as margin call, then your transactions will be closed once your account balance gets to $500 - at $500 you'll get a trading margin call.

What's 100% Margin Requirement Level?

If the broker sets 100% margin requisite of this level before stopping outliquidating your open trade positions automatically using a Margin Call - at $1,000 you will get a margin call, then your trades will be closed once your account balance gets to $1,000: Meaning the trades will liquidate as soon as you as a gold trader execute a 1 standard contract on this account because even if you as a trader you pay 10 dollars spread your trading account balance will get to $990 dollars and the needed margin requirement percent% is 100% that is $1,000, therefore your orders will immediately get liquidated using a Margin Call once your trading margin requirement falls below 100 %.

Most online brokers do not set 100 % gold trading margin requirement, but there are those brokers that set 100% margin are not good-enough for you at all, even those who set 50 % gold trading margin requirement are still not good-enough. Select those set 20% gold trading margin requirements, in fact, those brokers which set their margin requisite at 20% Margin Requirement are some of the best since due to the likely hood they stop out-out your trade using a Margin Call is reduced as cited in the example above.

To Learn More about Leverage & Margin - Read the Learn Tutorials Described Below:

Leverage & Margin Described

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