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What is the Difference Between Equity and Margin in Indices Trading?

Equity is the total amount of capital in a indices trader's account while margin is the amount of money required by your indices broker so as to allow you to continue trading with the borrowed amount that you have borrowed after using stock indexes trading leverage.

If there are no trades then the equity is equal to free margin - this free margin is the amount available for opening new stock indexes trades and because there are no open stock indexes trades then this free margin is equal to the equity in the indices trader's account.

When a indices trader opens new trade transactions using part of their equity then the margin used to open trades is known as used margin and the part of their equity that has not been used to open stock indexes trades is known as free margin.

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

Indices Trading Leverage and Margin Explained


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