Example of How Does 20% Indices Trading Margin Requirement Work?
Margin requirement is the percent of the trade transaction value that a indices trader must maintain in order to continue holding the open trade positions that have been opened using stock indices trading leverage.
Example of How Does 20% Indices Trading Margin Requirement Work
Now if Your Indices Trading Leverage is 100:1
When trading if you have $1,000 and use option 100:1 and buy 1 standard lot for $100,000 your indices trading margin on this trade transaction is the $1000 dollars in your stock indices trading account, this is the money that you will lose if your open trade transaction goes against you the other $99,000 that is borrowed from the stock indices trading broker, the stock indices broker will close the open indices trading transactions automatically once your $1,000 has been taken by the stock indices trading market.
But this is if your indices broker has set 0% Indices Trading Margin Requirement before closing your stock indices trades automatically.
For 20% Indices Trading Margin Requirement before closing your stock indices trades automatically, then your transactions will be closed once your balance gets to $200
indices brokers will set this level for a indices trader's account, choose those indices brokers that set 20% margin requirements, in fact, those indices brokers that set at 20% margin requirement are the best because the likely hood they close out your indices trade is reduced as shown in the examples above.
Some indices brokers will set these levels at for 50% Indices Trading Margin Requirement before closing your stock indices trades automatically, meaning that your transactions will be closed once your balance gets to $500.
To Learn and Know More about Indices Trading Leverage and Margin - How to Read the Topics Below:
Indices Trading Leverage and Margin Explained
Regulated Indices Broker Information: Read About Regulated Indices Broker Review
Takes 5 Minutes to Open an Account, Open an Account Early: Open Indices Account
