Sun. Apr 18th, 2021

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Margin Trading

1 min read

Margin trading is that the act of borrowing funds from a broker with the aim of investing in financial securities. The purchased stock is collateral for the loan. The primary reason behind borrowing money is to realize more capital to take a position and, by extension, the potential for more profits. Margin trading gives you the ability to enter into positions larger than your account balance.

The cost of the loan differs from one broker to a different . Similarly, margin loan rates vary. They can go as low as 1.6% or as high as 8%. In the US, the margin loan rate is established in line with the federal funds rate, so it varies over time.

On the surface, the practice sounds pretty simple. However, actually, margin trading may be a sophisticated process that carries significant risk. Due to the heightened risks, it requires a special account mentioned as a brokerage account. This is different from the standard brokerage account that the majority people are wont to.

To minimize risks and increase the possibility of realizing gains from margin trading- invest wisely, borrow less than the allowed limit and borrow only for the short term.

 

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Forex trading and any instruments related to Foreign Exchange Market are Speculative and carry substantial risk of loss of either partial equity or the entire deposit amount. Leverage adds up to the risk, before considering to invest in this venture, you should first consider your financial position and may seek the help of an independent financial advisor. FXtriangle dis-recommends the usage of loan instruments to trade in this market as it can hamper financial position. Please do not invest the money that you cannot afford to lose. FXtriangle provides all its services throughout the Globe Excluding (Nigeria, British Virgin Island & the Islamic Republic of Iran) and also provides limited service in some jurisdictions where investment in Overseas markets / Fx Exchanges are prohibited by Law If you are not sure to contact us before using any of our services. FXtriangle acts as an Independent Corporate Financial Advisor and connects you to various overseas exchanges and cannot be held liable for any financial damage occurring through their side. All of our partnered institutions are regulated in various jurisdictions.FXtriangle conducts an independent background check before partnering with any institutions to fulfill your investment objectives smoothly. The usage of our Business name, Logo or any trademark in any financial forum, website, review website, complaint arena, Billboards without our written permission will attract lawsuits.