Used Margin

When you open an account with the company trading allows a margin deposit of the advance will
continue to be a fixed amount that amount without prejudice to decide to buy a car, or to decide to enter into a deal, then your account will be divided into two parts:

Margin user used margin: a deposit which will be deducted in advance, a refundable deposit will be returned to your account after the sale of the car, whether it was sold at a profit or a loss.

Margin available usable margin: which is the amount left in your account after deducting the user margin, this amount is the maximum amount that allows you to defeat in the transaction.

How to calculate the user's margin?

We do not want to pay much attention to how the user in a margin account yourself often will not need so you will determine where the company beforehand the amount that will be deducted from your account as a token for every unit of the commodity. In the previous example car agency will tell you that it will be deducted the amount of $ 1,000 from your account in margin user for every car purchased. If I bought two cars will be deducted from your $ 2,000 margin the user will remain in your account $ 1,000 margin available.

Although the company, which will deal with Stagnate about the need to calculate the margin used by yourself, but it would be very useful to know how to do so yourself.

Can the user who his opponent will be a token provider for any commodity margin account with any company the following equation:

User margin = value of the item purchased full / percentage multiplier

In the previous example: the full value of the car = $ 10,000 and doubling the percentage allowed by the company is 10 times, which means that the company has doubled the capital you 10 times, so the margin by which St_chasm Agency:

Used Margin = Item full value / percentage multiplier = 10,000 / 10 = $ 1,000

Had I thought of buying two cars instead of the car will be used margin, which will be deducted from your account:

User = 20.000 / margin 10 = $ 2,000

In global markets are dealing brokerage firms that allow margin trading of various types of goods each company a certain quality of goods, the sale of each type on the basis of a fixed unit called the contract size which is less units are traded in the commodity.

In the previous example about cars = size of the contract is one car valued at $ 10,000, that is, you can not trade for less than a car valued at $ 10,000 and can be traded in multiples of this number was traded two cars or three etc ..

Of course it is not allowed to trade a car and a half !!

And be used margin calculation method:

Used Margin = number of contracts * contract / double volume ratio

The contract, which will learn to deal with the company and the proportion of pre-multiplexed before dealing with the volume, one of the things that may vary from one company to another.

In our previous example:

We know that the size of the contract = one car worth $ 10,000 and that the percentage multiplier = 10

So we know that if we are trading a car, the amount you St_chasm agency cars from our account is:

Used Margin = number of contracts * contract / percentage multiplier = 1 * 10.000 / 10 size = $ 1,000

But if we wanted to buy two cars will be:

Used Margin = number of contracts * contract / percentage multiplier = 2 * 10.000 / 10 size = $ 2,000

Thus you can be calculated for any number of user-margin cars if we assume that you wanted to buy three cars at once will be deducted the amount of $ 3,000 margin user.

If we assume that you have dealt with the agency cars have the same car value but it will give you double the ratio is equal to 20 times it means that this agency will allow you to trade Barabbas worth 20 times the amount paid a token you can calculate how much is the margin that will be deducted if you want to trade in one car:

Used Margin = number of contracts * contract / percentage multiplier = 1 * 10.000 / 20 size = $ 500

This means that this agency will be deducted from your account the amount of $ 500 for every car traded by. How to calculate the margin available?

Calculated by the following simple equation:

= Available margin balance - used margin

Only the previous example:

You deposit $ 3,000 in advance in your account that you opened the car agency Freehand have = $ 3,000

When I decided to buy a car, the company deduct the $ 1,000 margin the user, it will be the margin you have available now:

= Available margin balance - used margin = 3000 - 1000 = $ 2000

The maximum amount you can lose in the deal.

If we assume that you decided to buy two cars, it will be deducted $ 2,000 in margin and the user will be the margin you have available now:

= Available margin balance - used margin = 3000 - 2000 = $ 1000

The maximum amount you can lose in the deal.

Until now it has become learn the following:

That margin trading system is a system that gives you the possibility to trade goods worth over times your capital.

This type of trading is dealing with private companies are doubling your capital several times as it allows you to trade a commodity as compared to deduct a small percentage of its value as a token of the user.

These companies do not share your profit or loss where not only prompts the entire value of the goods sold and pay after the implementation of the exclusive purpose of buying and selling, which you specify a price that you choose commands.

If the item ordered it to sell at a higher price than the purchase price will be implemented and it will be deducted the full value of the item and would you Barbour plus full profit and like you own the item actually. Item though ordered it to sell at a price lower than the purchase price will be implemented and it will be deducted from your account has completed the full value of the item.