Indices Trading Margin Call Explained

What Happens When Your Free Indices Trading Margin Runs Out?

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

Some of the open trades may be closed or all of the open trades may be closed if this indices trading margin call is automatically executed by the stock indexes trading broker.

What is Indices Trading Margin Requirement Level?

Now if Your Indices Trading 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 trading margin on this indices trade transaction is the $1000 dollars in your stock indexes trading account, this is the money that you will lose is your open indices trade transaction goes against you the other $99,000 that is borrowed, the stock indexes broker will close the open transactions automatically using a Indices Trading Margin Call once your $1,000 has been taken by the stock indexes trading market.

But this is if your indices broker has set 0% Indices Trading Margin Requirement before closing your stock indexes trades automatically using this Indices Trading Margin Call.

What is 20% Indices Trading Margin Requirement Level?

For 20% indices trading margin requirement before closing your stock indexes trades automatically using a Indices Trading Margin Call, then your indices trade transactions will be closed once your balance gets to $200 - at $200 you will get a indices trading margin call.

What is 50% Indices Trading Margin Requirement Level?

For 50% requirement of this level before closing your stock indexes trades automatically using a indices trading margin call, then your transactions will be closed once your balance gets to $500 - at $500 you will get a indices trading margin call.

What is 100% Indices Trading Margin Requirement Level?

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

Most indices brokers do not set 100% indices trading margin requirement, but there are those indices brokers that set 100% indices trading margin are not suitable for you at all, even those that set 50% indices trading margin requirement are still not suitable. Choose those set 20% indices trading margin requirements, in fact, those that set at 20% Indices Trading Margin Requirement are some of the best because the likely hood they close out your trade using a Indices Trading Margin Call is reduced as shown in the examples above.

To Learn and Know More about Indices Trading Leverage and Indices Trading Margin - Read the Learn Indices Trading Tutorials Below: