Saturday, July 20, 2024

Maintenance Margin

In this article, We learn about “Maintenance Margin “.Let’s Go!

Maintenance Margin is the amount of funds that must be provided in order to keep margin trading open.

is also known as the variation margin or “free margin”.

The purpose is to ensure that you have sufficient funds in your account to always fund the present value of your positions and to cover any ongoing losses.

You need sufficient maintenance margin to “maintain” your open positions.

Maintenance margin is one of the two types of margin required for leveraged trading.

The other is the Initial Margin (or deposit margin), which is the amount required to open a new position.

To maintain a leveraged position, a certain amount of funds must be paid and held in your account.

If your position begins to lose money, your margin may no longer be sufficient to maintain the trade.

In this case, your broker will ask you to increase the funds in your account. This is called a Margin Call.

If you want to learn more foreign exchange trading knowledge, please click: Trading Education.

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