Margin is the required amount of equity you must have available in your account to open a trade and then maintain that open trade.
WorldWideMarkets platforms calculate margin in “real-time” based on the currency pair traded.
Margin requirements are affected by changes in the market rate. For non-dollar based currency pairs the margin required will be converted into U.S. Dollars at the prevailing market price for that pair. For example, the margin required to place a trade of GBP 100,000 should not be, and is not, the same as the margin needed for a trade of US$100,000.
There is a margin calculator within AlphaTrader for your convenience. It is located in the task bar under “Views” and labeled Trade Calculator. The Trade Calculator allows you to select your preferred instrument, leverage amount and trade size and will display maintenance margin requirements as well as financing rates. WWM recommends traders utilize the Trade Calculator to know exactly what will be required prior to placing trades.
Once a trade has been opened, the amount of margin being used can be monitored on the trading platform under the Used Margin column header.
Leverage allows clients to place trades while using only a portion of their equity as collateral. WorldWideMarkets offers clients multiple leverage amounts allowing traders to match their style of trading. A Trader who wishes to establish a larger position without committing additional funds could choose a maximum leverage amount of 400:1 but be advised–leverage may work against you as well as for you.
At 400:1 you are required to put up less margin than at 50:1 Thus, should you incur a margin call, more of your principal is at risk with the higher level of margin. A trader that initially deposits $1,000 in equity and selects 100:1 leverage will be able open a position of up to $100,000. That same deposit of $1,000 will support a position of up to $400,000 at 400:1 leverage.
WorldWideMarkets asks that you consider the risks associated with increasing your leverage. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit. You may sustain a total loss of initial margin and you may be required to deposit additional funds to cover a short margin position.
If the equity in an account falls below the required maintenance margin, all existing positions will automatically close at the prevailing market rates.
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