What's Margin Call Indices?
A margin call is when a indices trader's account free margin goes below required margin level that's set by the broker. This means that because the free margin in indices trader's account has gone below required margin level then the trader gets a margin call and some of the open trades in indices trader's are closed by the broker until this margin level goes back up to above required trading 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 stock indices trading broker.
What's Stock Indices Margin Requirement Level?
Now if Your Stock Indices Trading Leverage is 100:1
When trading if you have $1,000 & use stock indices leverage option of 100:1 and buy 1 standard lot for $100,000 your margin on this trade is the $1000 dollars in your stock indices trading account, this is the money that you will lose if your open trade goes against you the other $99,000 that is borrowed, stock indices broker will close the open indices trades automatically using a Indices Trading Margin Call 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 using this Margin Call.
What is 20% Indices Margin Requirement Level?
For 20% margin requirement before closing your stock indices trades automatically using a Margin Call, then your transactions will be closed once your trade account balance gets to $200 - at $200 you'll get a margin call.
What is 50% Indices Margin Requirement Level?
For 50% requirement of this level before closing your stock indices trades automatically using a margin call, then your transactions will be closed once your trade account balance gets to $500 - at $500 you'll get a margin call.
What is 100% Indices Margin Requirement Level?
If the broker sets 100% margin percentage level requirement of this level before automatically closing your open trade positions automatically using what is known as a margin Call - at $1,000 you'll get a margin call, then your stock indices trades will be closed once your trade account balance gets to $1,000: Meaning stock indices trades will close-out as soon as you execute a 1 standard lot on this indices trading account because even if you pay 1 point spread your indices trading account balance will go to below $1,000 and needed margin requirement percentage is 100% i.e. 1,000 dollars, therefore your stock indices orders will immediately get closed using a Margin Call once your margin requirement falls below 100%.
Most indices brokers do not set 100% margin requirement, but there are those index brokers that set 100% margin percent level requirement are not suitable for you at all, even those that set their requirement at 50% trading margin percentage level requirement are still not suitable. Choose the ones that set 20% trading margin percentage level requirement, in fact, those indices brokers that set at 20% Indices 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 example above.
To Learn & Know More about Indices Leverage & Margin - How to Read the Topics Below:
Indices Leverage and Margin Explained
