Trade Stock Indices

How is Used Stock Indices Margin Calculated?

Used Stock Margin

What is Used Indices Margin? : amount of money on your account which has already been used when buying a trade order, this stock order is the one that is displayed and shown in open trades. As a trader you can not use this amount/sum of money after opening a trade because you've already used it & it isn't available to you.

In other terms, because your online trading broker has opened up a trade for you using the capital you've borrowed, you as a trader must maintain this usable margin for your account as a security collateral to allow you to continue using this leverage which the broker has assigned you.

Explanation of How is Used Margin Calculated on the MT4?

Shown below are margin calculations from MT4, where the leverage setting is 100:1. A margin equal to 1 percent amounts to $2683.07, yielding a total manageable asset value of $268,307 for the trader. This occurs because the trader commits only a small portion of their capital, borrowing the remainder. At this 100:1 leverage, the trader is committing 1 percent of their entire trading funds, which calculates to $2683.07. Therefore, if 1% equals $2683.07, the full 100% value is $268,307.

How is Used Margin Calculated? - How is Used Index Margin Calculated?

How is Used Margin Calculated?

Used Margin - $2683.07

Indices Margin used to open stock trades on MT4 example illustration set-out above

Understanding Leverage and Margin - Check Out These Lessons:

Indices Leverage & Margin Example Explained

More Topics and Tutorials:

Stock Index Broker