Margin Level in Oil Example
We shall first explain the various oil margin levels used in oil platforms and then explain what oil margin level is using an example in MetaTrader 4 software.
Oil Trading Margin, Margin Required, Equity, Used Crude Oil Margin & Free margin
What's Margin Required? : It is amount of money your oil broker requires from you to open a position. It is expressed in percentages.
What's Equity? : It is total amount of capital you have in your account.
What is Used Oil Margin? : amount of money in your account that has already been used up when buying a oil lot, this contract is one that is displayed in open positions. As a trader you can not use this amount of money after opening a trade transaction because you've already used it & it is not available to you.
In other words, because your oil broker has opened up a position for you using the capital you've borrowed, you must maintain this usable margin for your trading account as a security to allow you to continue using this oil leverage he has given you.
What is Free Oil Trading Margin? : amount in your trading account that you can use to open new trades. This is amount of money in your account which hasn't yet been oil leveraged because you've not yet opened a transaction with this money - this money also is very important for you as a trader because it enables you to continue holding your open trades as will be explained below.
Example of What are the Oil Trading Margin Levels in MetaTrader 4 Software
The oil margin example in MetaTrader 4 oil Platform below, the set oil trading leverage ratio is 100:1, the oil margin which is 1% is $2683.07, therefore the total amount controlled by oil trader is: $268,307 - this is because with this leverage the trader has used little of his money & borrowed the rest, with this set at 100:1, the trader is using 1 % of their capital, this 1% is equivalent to $2683.07, if 1% is equivalent to $2683.07 then 100% is $268,307
MetaTrader 4 Oil Leverage Margin Calculation - How is Oil Trading Margin Level Calculated?
Oil Used Oil Margin - $2683.07
Oil Trading Margin used to open trades in the MetaTrader 4 examples above
Crude Oil Free Oil Margin - $13,433.48
Free Oil Trading Margin that can be used to open new crude oil trades in MT4 example above.
To Learn & Know More about Crude Oil Leverage & Margin - How Do I Read the Topics Below:
Oil Trading Leverage and Margin Described
