What is a Oil Trading Margin Trading Account?
A Oil Trading Margin trading account is an account that allows crude oil traders to control a large amount of oil trade transaction using little of their own capital while borrowing the rest from their crude trading broker.
What is a Oil Trading Margin Trading Account?
Obtaining this margin account will enable you as a trader to borrow money from your oil broker to trade oil with.
The amount of borrowing power your oil account gives you what is called " oil leverage", and is usually expressed as a ratio - a ratio of 100:1 means you can control resources worth 100 times your deposit - oil leverage 100:1 means you can borrow 100 dollars from your oil broker for every $1 dollar in your crude trading account.
What this means in Oil terms is that with 1% margin in your crude oil account you can control one standard lot or 1 contract worth $100,000 with a $1,000 deposit.
However, Trading this oil account increases both potential for profits as well as losses. In Oil you can never lose more than you invest, losses are limited to your deposits & usually brokers will close a trade which extends beyond your deposit amount by executing a margin call. Oil traders must therefore try to keep their margin requirement level above that required. By using oil money management rules and keeping your used oil leverage below 5:1.
To Learn and Know More about Oil Trading Leverage & Margin - How Do I Read the Topics Below:
Oil Trading Leverage and Margin Described
