Sun. May 16th, 2021

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Margin Call Level at 100% and No Separate Stop Out Level

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Margin Call Policies varies from different retail forex brokers and CFD providers. While few only function solely with Margin Calls, others have separate Margin Call and Stop Out Levels.

The broker defines its Margin Call Level at 100% and has no separate Stop Out Level.

Deposit Funds Into Trading Account:

Let’s say you have an account balance of $1,000.

Calculate Required Margin:

You want to travel long EUR/USD at 1.15000 and need to open a 1 mini lot (10,000 units) position. The Margin Requirement is 2%.

Since EUR is the base currency. this mini lot is 10,000 euros, which suggests the position’s Notional Value is €10,000.

Since our trading account is denominated in USD, we’d like to convert the worth of the EUR to USD to work out the Notional Value of the trade.

$1.15 = €1
$11,500 = €10,000

The Notional Value is $11,500.
Now we can calculate the Required Margin:

Required Margin = Notional Value x Margin Requirement
$230 = $11,500 x .02

Assuming your trading account is denominated in USD, since the Margin Requirement is 2%, the specified Margin are going to be $230.

 

 

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