Trading with margins

Trading with margins

Margin Call

Maintenance margin level is the minimum amount needed in your equity to maintain an open position. 10Pips will close open positions until account equity exceeds these margin level requirements.

Example:

• You signed up and deposited $600.
• Balance = $600 (Deposits - Withdraws + closed positions P&L).
• Available Balance: $600 (Balance + - Initial Margins).
• P&L = $0 (profits and losses of all open positions + daily premiums).
• Equity: $600 (Balance + open positions P&L).
• You buy 10 CFD's of Google shares at $540.00
• The total amount bought is: 10 * $540.00 = $5400
• Initial Margin needed for 10 Shares of Google is 10% = $540
• Maintenance margin needed to maintain 10 Shares of Google is 5% = $270
• You will get a margin call If equity falls below $270. 10Pips will liquidate your open positions.
• Balance = $600.
• Available Balance = $60 ($600 - 10% * $5400 = $60).
• P&L = $0.
• Equity: $600 ($600 + $0).
• Google Falls to $520.
• Balance: $600.
• P&L = -$200 (10 * $520 – 10 * $540).
• Available Balance = $0 ($600 - 10% * $5400 - 10 * ($520 - $540) = - $140).
• Equity = $400 (-$200 + $600).
• Google Falls to $490.
• You will get a margin call; 10Pips will liquidate your Google position
• Balance = $600.
• Available Balance = $0 ($600 - 10% * $5400 – 10 * ($490 - $540)= -$460).
• P&L = -$500 (10 * $490 – 10 * $540).
• Equity = $100 (- $500 + $600).
• Margin Call Your Equity = $100, and to maintain an open position on 10 Google Shares you need $270. Therefore 10Pips will liquidate the position.
• Balance = $100 (Balance changes when closing a position or withdrawing funds).
• Available Balance = $100 (Deposits - Withdraws + P&L of closed positions).
• P&L = $0 (no open positions).
• Equity = $100 (Balance + P&L of open positions).

Initial Margin

Available account equity must exceed initial margin level requirement in order to open a new position. These requirements are specific to each financial instrument. Press 'details' in the row of the instrument in the opening screen to see the 'Initial Margin Level' for a specific instrument.

Maintenance Margin

Available account equity must exceed maintenance margin level in order to keep a new position open. These requirements are specific to each financial instrument. Press 'details' in the row of the instrument in the opening screen to see the 'Maintenance Margin Level' for a specific instrument.