Trade Stock Indices

What Happens When Free Stock Trading Margin Hits and Gets To Zero?

What Happens When Free Trading Margin Runs Out?

A margin call is when a stock indices trader's trading account free margin goes below the required margin level that's set by online broker. This means that because free margin in trader's account has gone below the required margin level then the trader gets a margin call and some of the open trade transactions in trader's are closed by broker until this margin level goes back up to above required margin level.

Some of the open trades might be closed or all of the open trade positions may be closed if this margin call is executed automatically by online broker.

What is Stock Margin Requirements Level?

Now if Your Leverage is 100:1

When trading if you have $1,000 dollars & use leverage of 100:1 & buy 1 standard indices lot for $100,000 dollars your margin on this trade is $1000 in your account, this is the money that you'll lose if your open trade transaction goes against you : the other $99,000 that's borrowed, broker will close-out the open trade transactions mechanically by using a Margin Call once your $1,000 dollars has been taken out by market.

But this is if your broker has set 0 percent% Stock Indices Margin Requirements before closing outliquidating your stock trade transactions mechanically by using this Margin Call.

What's 20% Stock Indices Margin Requirements Level?

For 20 % margin requirement before stopping out your stock trade positions mechanically by using what's known as a Margin Call, then your positions will be closed once your account balance gets to $200 - at $200 you will get and receive a margin call.

What's 50 % Stock Indices Margin Requirements Level?

For 50% prerequisite of this level before stopping out your stock trade positions mechanically by using what's referred to as a margin call, then your transactions will be closed once your account balance gets to $500 - at $500 you will get and receive a margin call.

What's 100% Index Margin Requirements Level?

If broker sets 100% margin requirement for this level before closing outliquidating your open positions mechanically/automatically by using a Margin Call - at $1,000 you will get and receive a margin call, then your stock trade positions will be closed once your trade account balance gets to $1,000: Meaning stock trade positions will close-out as soon as you execute a 1 standard indices lot on this account because even if you pay $10 spread your account balance will get to $990 and the needed margin requirement percentage is 100% that is $1,000 dollars, therefore your open positions will immediately get closed using a Margin Call once your account margin requirement drops below 100%.

Most brokers do not set 100 % margin requirement, but there are those brokers that set 100% margin requirement level are not suitable for you at all, even those that set their requirement at 50% margin % level requirement still are not good enough. Select those brokers set 20% margin percentage level requirement, in fact, those brokers that set at 20% Stock Indices Margin Requirement are among the best since due to and because of the likely hood they stop out-out your trade using a Margin Call is reduced and minimized as shown on the exemplifications above.

To Learn & Know More about Stock Leverage and Margin - How to Read the Learn Indices Topics Below:

Leverage and Margin Discussed

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