How is Indices Trading Margin Calculated? Indices Trading Margin is equal to Used Indices Trading Margin added to Free Indices Trading Margin
Indices Trading Margin = Used Indices Trading Margin + Free Indices Trading Margin
What is Used Indices Trading Margin? : amount of money in your account that has already been used up when buying a indices lot, this contract is one that is displayed in open positions. As a trader you can't use this amount of money after opening a trade because you have already used it & it is not available to you.
In other words, because your indices 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 indices trading leverage he has given you.
What is Free Indices Trading Margin? : amount in your account that you can use to open new trades. This is amount of money in your account which hasn't yet been indices trading leveraged because you have not yet opened a trade with this money - this is also very important for you as a trader because it enables you to continue holding your open trade transactions as described and illustrated below.
Example of How is Indices Margin Calculated on MetaTrader 4?
The indices margin examples on MetaTrader 4 indices Platform below, the set stock index trading leverage is 100 : 1, the indices trading margin is equal to indices trading used margin plus indices trading free margin.
Indices Trading Margin is equal to Used Indices Trading Margin + Free Indices Trading Margin
Indices Margin - $16,116.55
Indices Trading Margin is equal to Used Indices Trading Margin + Free Indices Trading Margin
$16,116.55 = $2683.07 + $13,433.48
Used Indices Trading Margin - $2683.07
Indices Trading Margin used to open trades in MetaTrader 4 platform example above
Free Indices Trading Margin - $13,433.48
Free Indices Trading Margin that can be used to open new stock indices trades on the MT4 platform example above.
Indices Trading Margin is equal to Used Indices Trading Margin + Free Indices Trading Margin
To Learn & Know More about Indices Trading Leverage & Margin - How to Read the Topics Below:
Stock Indices Leverage and Margin Explained
