What's a Indices Trading Margin Account?
A Indices Trading Margin trading account is an account that allows stock indices traders to control a large amount of indices trade transaction using little of their own capital while borrowing the rest from their stock indices trading broker.
What is Indices Trading Margin Account?
Obtaining this margin account will enable you as a trader to borrow money from your indices broker to trade indices with.
The amount of borrowing power your indices trading account gives you what is called " indices trading leverage", and is usually expressed as a ratio - a ratio of 100:1 means you can control resources worth 100 times your deposit -indices trading leverage 100:1 means you can borrow 100 dollars from your indices broker for every $1 dollar in your stock indices trading account.
What this means in Indices Trading terms is that with 1 % margin in your indices trading account you can control one standard lot or 1 contract worth $100,000 with a $1,000 deposit.
However, Trading this indices trading account increases both potential for profits as well as losses. In Indices Trading you can never lose more than you deposit, losses are limited to your deposits & usually brokers will close a transaction that extends beyond your deposited amount by executing what is referred to as a margin call. Indices traders must therefore try to keep their margin requirement level above that required. By using indices money management rules & keeping your used indices leverage below 5:1.
To Learn & Know More about Indices Leverage & Margin - How to Read the Topics Below:
Indices Leverage and Margin Explained
