What Happens in After You Have no Free Metals Trading Margin Left?
If you run out of free margin in metal trading account you will get a margin call and some or all of your open trade positions will be automatically closed or stopped out by your metal trading broker.
A margin call occurs when a metals trader's account free margin goes below the required margin level that is 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 margin level requirement goes back up to above the required margin level.
What is Metal Margin Requirement Level?
Now if Your Metals Trading Leverage is 100:1
When trading if you have $1,000 & use metals leverage option of 100:1 & buy 1 standard lot for $100,000 your margin on this trade is $1000 dollars in your metal trading account, this is money that you'll lose if your open trade goes against you the other $99,000 that is borrowed, the broker will close the open metals trade transactions automatically using a Metals Margin Call once your $1,000 has been taken by the metals market.
But this is if your metals broker has set 0% Metals Margin Requirement before closing your metal trades automatically using this Margin Call.
What is 20% Metals Trading Margin Requirement Level?
For 20% margin requirement before closing your metal trades automatically using a Margin Call, then your transactions will be closed once your balance gets to $200 - at $200 you'll get a margin call.
What's 50% Metals Trading Margin Requirement Level?
For 50% requirement of this level before closing your metal trades automatically using a margin call, then your transactions will be closed once your balance gets to $500 - at $500 you'll get a margin call.
What's 100% Metals Trading Margin Requirement Level?
If the broker sets 100% trading margin requirement of this level before closing out your open trade positions automatically using what is called a Margin Call - at $1,000 you'll get a margin call, then your metal trades will be closed once your balance gets to $1,000: Meaning the metal trades will closeout as soon as you execute a 1 standard lot on this metals trading account because even if as a trader you pay 10 dollars spread your metals account balance will get to below $1,000 & needed margin requirement percent is 100% i.e. 1,000 dollars, therefore your metals orders will immediately get closed using a Margin Call once your margin requirement falls below 100%.
Most metals brokers don't set 100% margin requirement, but there are those metal brokers that set 100% trading margin requirement level aren't suitable for you at all, even those metals brokers that set 50% margin requirement level are still not suitable. Choose those brokers set their margin requirement at 20% margin requirement level, in fact, those brokers that set it at 20% Metals Margin Requirement are some of the best because the likely hood they close-out your trade using a Metals Margin Call is reduced as shown in the examples above.
To Know More about Metals Leverage & Margin - How to Read the Topics Below:
Metals Leverage and Margin Course
