What is margin?
Margin refers to the amount of capital needed to maintain an open position and is calculated based on the trade value converted into US Dollars (for US Dollar denominated accounts). The percentage of margin required for any given trade will also be dependent on the leverage scale and corresponding margin percentage selected for the account.
For example, a leverage of 50:1 will have a corresponding margin requirement of 2% of the value of the trade size (value in USD of nominal trade amount).
Important Note: Trading on margin can both positively and negatively influence your trading experience as both profits and losses can be substantially increased.
Why trade on margin?
Trading on Margin (Trading with Leverage) is a common attraction of the Forex market. It allows you to open trades that are larger than the capital in your account.
What leverage does WWM offer?
By default, WorldWideMarkets Ltd. (WWM) offers 400:1 leverage on its Forex trading accounts.
How can I calculate margin requirements?
WWM margin requirements (per 10K lot) is determined by taking a percentage of the notional trade size converted back into a USD value based on prevailing rates.
For example, a Forex trading live account with a leverage level of 100:1 selected will require 1% margin on the US Dollar value of open positions. Therefore, a trade for 100,000 EUR/USD at $1.3450, which has a USD value of $134,500 will require a 1% margin or $1,345.00 in collateral that a trader would need to use in order to maintain that open position. Once a trade is closed, either due to a stop/limit or manual closure, or even a liquidation call (margin-call) due to insufficient margin, the margin amount that was used to maintain the trade will be made available (freed-up) and part of a trader’s usable margin again.
For your convenience, we have included a Trade Calculator within our AlphaTrader platform which will calculate margin requirements for you.
Where can I view my margin requirements?
Current margin requirements can be viewed by accessing the trade calculator found within the WWM trading platforms.
Alternatively, you can visit our Margin Requirements Table page. This page is subject to change without notice based on price fluctuations.
Is there a debit balance risk? Can I lose more money than I deposit?
Not with WWM. It is WWM’s policy to credit accounts to a zero balance when debit balances occur as a result of trading.
One of the greatest concerns traders have about leverage is that a sizable loss could result in owing money to their broker. At WWM, your maximum risk of loss is limited by the amount in your account, and according to the customer account agreement.
If account equity falls below margin requirements, WWM’s trading platforms trigger an automatic order to close all or some open positions at the prevailing rates in order to prevent a negative account balance. This automatic process of closing trades is known as a margin call or liquidation call.