Indices Margin Call Level
What Happens When Free Stock Indices Margin Runs Out?
A margin call is when a indices trader's account free indices margin goes below the required indices margin level that's set by the broker. This means that because the free indices margin in the trader's account has gone below required indices margin level then trader gets a indices margin call & some of the open trades in trader's are closed by the broker until this margin level goes back up to above required indices margin level.
Some of the open trades might be closed or all of the open trades may be closed-out if this margin call is automatically executed by broker.
What is Margin Requirement Level?
Now if Your Stock Indices Leverage is 100:1
When trading if you have $1,000 and use leverage of 100:1 and buy 1 standard indices lot for $100,000 your indices margin on this trade transaction is $1000 dollars in your stock trading account, this is the money that you will lose is your open trade transaction moves against you the other $99,000 that is borrowed, broker will close out the open trades automatically using a Indices Margin Call once your $1,000 has been taken by the stock trading market.
But this is if your indices broker has set 0 percent Indices Margin Requirement before liquidating your stock trades automatically using this Trading Margin Call.
What is 20% Margin Requirement Level?
For 20% margin requirement before closing your stock trades automatically using a Indices Margin Call, then your stock trades will be closed once your trade account balance gets to $200 - at $200 you will get a indices margin call.
What is 50 percent Indices Margin Requirement Level?
For 50 percent requirement of this level before liquidating your stock trades automatically using a indices margin call, then your transactions will be closed once your trade account balance gets to $500 - at $500 you will get a indices margin call.
What is 100 Percent Indices Margin Requirement Level?
If the broker sets 100 Percent indices margin requirement of this level before liquidating your open trades automatically using a Indices Margin Call - at $1,000 you will get a indices margin call, then your stock trades will be closed once your trade account balance gets to $1,000: Meaning stock trades will close-out as soon as you execute a 1 standard indices lot on this account because even if you pay $10 dollars spreads your indices account balance will go to $990 & needed indices margin requirement percent is 100 Percent that is $1,000, therefore your stock orders will immediately get closed using a Indices Margin Call once your indices margin requirement falls below 100%.
Most indices brokers do not set 100% margin requirement, but there are those brokers that set 100% margin aren't suitable for you at all, even those who set 50% margin requirement are still not suitable. Select those set 20 % margin requirements, in fact, those brokers that set at 20% Margin Requirement are some of the best because the likely-hood they close-out your trade using a Indices Margin Call is reduced as pictured in the example above.
To Learn and Know More about Indices Leverage & Indices Margin - How to Read the Learn Indices Guides Below:
Leverage & Indices Margin Described
What's a Trade Plan? - Written Plan Example Template
Alternatives: Automated EA Trading or Copy and Paste Signals
