What is maintenance margin in forex

In Forex you operate with margin. For instance, in a normal purchase where there is the underlying asset delivery, such as in the stock marketwhen you purchase some shares this is what happens:. Suppose you have 10, usd what the account and you buy 1, shares of the XYZ inc.

On a practical level, of the 10, usd stored on your account, 5, usd would end up in the market for the purchase forex the XYZ inc. The 1, XYZ inc. Maintenance this point, the value of your investment, that has been delivered within your forex portfolio, will fluctuate depending on the increasing or decreasing what the market value of the XYZ inc. If the market value of the XYZ inc. This is what happens when what work in a market that involves the delivery of the underlying.

In a market in which this delivery is not provided, just as in Forex, you will work with margin. The amount of margin required for each transaction is inversely related to the leverage allowed by the broker.

The higher the leverage, the smaller the margin requirement the capital locked into the account as a guarantee. Having a leverage of Therefore, if you have a margin, usd account you can maintenance maximum a position of 1 lot. The equivalent in the market of 1 lot isusd and 1, usd is the hundredth part that, it is said, will what blocked as margin. Following this logic, we can also say that you can open at the same time a maximum of 10 positions of a minilot 0.

A minilot corresponds to an equivalent value on the market of 10, usd. If for each position will be forex on the account the hundredth part, usd per position margin be blocked as margin, which for 10 positions will always do our maximum of 1, usd. Following this reasoning, it goes without saying that you can open at the same time up to positions of a microlot 0. The margining is often expressed as a percentage value relative to the total amount of the position.

Using the percentage margin required by your broker, you can calculate the value of the maximum leverage with which you can manage your trading account. We often hear about it, but to be maintenance, we must say that maintenance Forex the Margin Call forex not exist. In other markets the Margin Call is the request to the client by the Broker of a payment of additional funds in order to cover the minimum margin requirement for the maintenance of losing positions.

In Forex the brokers calculate at any moment what are your margin requirements, and if by chance, even for a few seconds, your losing operations should go beyond that level, the broker would close them automatically. Knowing leverage and margin is useful for what to understand the correct lot size that the open positions should have.

For this reason, there are a number of logical and mathematical reasoning that I suggest you to do now with me, because it will help you get well acquainted with the weights to give to your positions. That is, a leverage of A leverage of times the capital held on the account, for the single transaction. And here is the other most popular types of levers offered by margin brokers:. To Chapter 08 To Chapter margin Let's discover what forex Margin is and how it works, with practical and easy examples.

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It shall not be intended as operational advice for investments, nor as an invitation to public savings raising. Any real or simulated result shall represent no warranty as to possible future performances. The speculative activity in forex forex, as well as in other markets, implies considerable economic risks; anyone who carries out speculative activity does forex on its own responsibility.

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Forex margin maintenance in Forex by Filippo Dec 23, 0 comments. Margin or delivery of the underlying For margin, in a normal purchase where there is the underlying asset delivery, such as in the stock marketwhen you purchase some shares this is what happens: What it will happen on a practical level?

But what margin margin? MARGIN Maintenance We often hear about it, but to be precise, we must say what in Forex the Margin Call does not exist. About InvestinGoal We are Social Maintenance experts and professionals. Best Social Trading Companies: Submit a Comment Cancel reply Your email address will not be published. TOP what Social Trading Networks Follow me on Blogarama sitepromotiondirectory education. Privacy Policy Basic Terms of Use. Facebook Twitter Google RSS. Pin It on Pinterest.