Trading under the Margin Trading allows you to buy and sell currency for real currency without exchange one currency for another. All operations are performed under full netting, or vzamozachet, without delivery of the underlying asset.
Meaning of Margin Trading is currency arbitrage and how to exchange rate differences.
Margin Trading is a condition of placing the customer in the bank collateral, or margin, which is regarded as the provision of its arbitrage transactions and, therefore, the trader can lose more than its value margin.
The second feature of the Margin Trading is to provide a so-called leverage. Leverage - is a factor, the ratio between the maximum possible amount of tradable currency and the value of the margin.
Suppose your trading account is USD 10000.00
The shoulder is 100, or 1%. Leverage is expressed as a% minimum margin.
The maximum amount of tradable currency permissible under such margin will be:
USD 10 000 * 100 = USD 1 million. Or in other words, the trader must have 1% of the amount traded.
Working with the shoulder can greatly increase the potential profit.
The amount of margin customer and the profit (or loss) of variation margin. The ratio of the minimum margin for variation margin can not exceed 100%, or unit.
Because of its speculative direction, each operation in the margin trading consists of two parts: the opening and closing a position - full trade. While the operation is not closed the other transaction, the broker there is a record of an open position.
Trading on the forex market is a fixed amount - lots. You can buy 100,000 euros (a lot), 200, 000 (2 lots), but not the 150 000 euros. Now distinguish two types of lots: standard and mini. Mini lot, usually 10 times smaller than the standard.
Margin security transactions (margin) = 1% of the market stoimoti base currency * transaction size in lots.
That is, for example, for pairs EURUSD, EURJPY, EURGBP at 1.3357 euro market rate and obeme transaction in a margin item will be $ 1335.7.
Margin Call Level - the level of alerts (usually about 30%)
Stop Out Level - the closing of unprofitable trades (typically around 20%)
Calculation of% Margin Call = (Equity / Margin) * 100%, where
- Equity - the current level of client
- Margin - margin of the current client
Dictionary
Margin (from the English. Margin) - common in the stock market and banking practice, the term for the amount of security under which the credit is extended.
Margin trading - trading with borrowed money issued by the dealing center or the brokerage firm under a certain collateral (margin deposit).
Meaning of Margin Trading is currency arbitrage and how to exchange rate differences.
Margin Trading is a condition of placing the customer in the bank collateral, or margin, which is regarded as the provision of its arbitrage transactions and, therefore, the trader can lose more than its value margin.
The second feature of the Margin Trading is to provide a so-called leverage. Leverage - is a factor, the ratio between the maximum possible amount of tradable currency and the value of the margin.
Suppose your trading account is USD 10000.00
The shoulder is 100, or 1%. Leverage is expressed as a% minimum margin.
The maximum amount of tradable currency permissible under such margin will be:
USD 10 000 * 100 = USD 1 million. Or in other words, the trader must have 1% of the amount traded.
Working with the shoulder can greatly increase the potential profit.
The amount of margin customer and the profit (or loss) of variation margin. The ratio of the minimum margin for variation margin can not exceed 100%, or unit.
Because of its speculative direction, each operation in the margin trading consists of two parts: the opening and closing a position - full trade. While the operation is not closed the other transaction, the broker there is a record of an open position.
Trading on the forex market is a fixed amount - lots. You can buy 100,000 euros (a lot), 200, 000 (2 lots), but not the 150 000 euros. Now distinguish two types of lots: standard and mini. Mini lot, usually 10 times smaller than the standard.
Margin security transactions (margin) = 1% of the market stoimoti base currency * transaction size in lots.
That is, for example, for pairs EURUSD, EURJPY, EURGBP at 1.3357 euro market rate and obeme transaction in a margin item will be $ 1335.7.
Margin Call Level - the level of alerts (usually about 30%)
Stop Out Level - the closing of unprofitable trades (typically around 20%)
Calculation of% Margin Call = (Equity / Margin) * 100%, where
- Equity - the current level of client
- Margin - margin of the current client
Dictionary
Margin (from the English. Margin) - common in the stock market and banking practice, the term for the amount of security under which the credit is extended.
Margin trading - trading with borrowed money issued by the dealing center or the brokerage firm under a certain collateral (margin deposit).
