Margin is the amount of money required in your trading account to open a position. It acts as a deposit or collateral for using leverage. For instance, if your broker offers 1:100 leverage, you only need 1% of the total trade value as margin.
For a $10,000 position, the margin required would be $100. Margin allows traders to control larger positions but also exposes them to greater risks. Proper margin management is critical to avoid a margin call, where the broker requests additional funds to maintain open positions.
For a $10,000 position, the margin required would be $100. Margin allows traders to control larger positions but also exposes them to greater risks. Proper margin management is critical to avoid a margin call, where the broker requests additional funds to maintain open positions.
