need to understand margins.

J

junkone

what is the difference between usable margin vs usable maint margin?
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Here is a screenshot from fxcm. i was told that i have 1:50 leverage but yet, having opened a microlot, it has used up 100$ worth of margin.
it appears to be 1:10 leverage if it is the case.
 
Usable margin is margin that is available for you to trade instruments. Usable maintenance margin is overnight margin.
 
junkone said:
i am trading forex. would there be a difference between overnight margin vs usable margin?
More...

It's a bit different in FX trading, after you open a position there are four variables that are important to you: , equity, used margin (constant), free margin and margin level.

Margin (used) is position size divided by leverage,

Equity is Balance - Floating P/L (profit/loss - swaps - spreads - commission)

Free margin is equity - used margin.

and finally, margin level = used margin/equity

When you add a new position, respective used margin and floating P/L is added to the used margin and floating P/L of the first position. Equity and margin level (for combined position) is recalculated according to new values of used margin and aggregated floating P/L.

As far as I know there is no such thing as maintenance margin in CFDs trading. You are required to keep margin level for all your positions combined above 50%. Dropping below 50% you get margin call, if you reach 30% you get stopped out.
 
When trading forex, you are only required to put up a small amount of capital to open and maintain a new position.This capital is known as the margin.
 
Margin required for a trade depends upon the trade that you enter into- its size, price and the leverage that you avail. There are margin calculators available by every broker. You can easily calculate the margin required to trade a particular pair.
 
kroxobor said:
It's a bit different in FX trading, after you open a position there are four variables that are important to you: , equity, used margin (constant), free margin and margin level.

Margin (used) is position size divided by leverage,

Equity is Balance - Floating P/L (profit/loss - swaps - spreads - commission)

Free margin is equity - used margin.

and finally, margin level = used margin/equity

When you add a new position, respective used margin and floating P/L is added to the used margin and floating P/L of the first position. Equity and margin level (for combined position) is recalculated according to new values of used margin and aggregated floating P/L.

As far as I know there is no such thing as maintenance margin in CFDs trading. You are required to keep margin level for all your positions combined above 50%. Dropping below 50% you get margin call, if you reach 30% you get stopped out.
More...

at what price would i get a margin call? here is my porfolio. i have average cost price of .7011 for aud.usd.
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