How is Metals Trading Margin Level Calculated?

We shall first explain the various metals trading margin trading terms used in metals platforms and then explain how metals trading margin level is calculated using an example on MT4 platform.

Metal Trading Margin, Margin Required, Equity, Used Metals Trading Margin & Free margin

What is Margin Required? : It is amount of money your metals broker requires from you to open a position. It is expressed in percentages.

What is Equity? : It is total amount of capital you've in your account.

What is Used Metals Trading Margin? : amount of money in your account that has already been used up when buying a metals lot, this contract is one that is displayed in the open trades. As a trader you can't use this amount of money after opening a trade transaction because you have already used it and it is not available to you.

In other words, because your metals broker has opened up a position for you using the capital you have borrowed, you must maintain this usable margin for your account as a security to allow you to continue using this metals leverage he has given you.

What is Free Metals Margin? : amount in your trading account which you can use to open new trade positions. This is amount of money in your account that hasn't yet been metals trading leveraged because you've not yet opened a trade with this money - this is also very important for you as a trader because it enables you to continue holding your open trade transactions as described and illustrated below.

Example of How is Metal Trading Margin Level Calculated on MT4 Software?

The metals margin example in MT4 metals Software below, the set metal trading leverage ratio is 100:1, the metals margin which is 1% is $2683.07, therefore the total amount controlled by metals trader is: $268,307 - this is because with this leverage the trader has used little of his money and borrowed the rest, with this set at 100:1, the trader is using 1% of their trading capital, this 1% is equivalent to $2683.07, if 1% is equal to $2683.07 then 100% is $268,307

Metals Trading Margin Level Explained Using Example on MT4 Platform