What Happens When Free Stock Indices Trading Margin Hits Zero?

What Happens When Free Indices Trading Margin Runs Out?

A indices margin call is when a indices trader's account free indices margin goes below the required indices trading margin level that's set by the broker. This means that because the free indices trading margin in the trader's account has gone below required indices margin level then trader gets a indices trading margin call & some of the open trades in indices trader's are closed by the broker until this indices margin level goes back up to above required indices trading margin level.

Some of the open trades might be closed or all of the open trades may be closed-out if this indices trading margin call is automatically executed by indices broker.

What's Stock Indices Margin Requirement Level?

Now if Your Indices Leverage is 100:1

When trading if you have $1,000 and use leverage of 100:1 and buy 1 standard indices lot for $100,000 your indices trading margin on this trade transaction is $1000 dollars in your indices account, this is the money that you will lose is your open indices trade goes against you the other $99,000 that's borrowed, indices broker will close out the open trades automatically using a Indices Trading Margin Call once your $1,000 has been taken by the stock indices trading market.

But this is if your indices broker has set 0% Indices Trading Margin Requirement before closing your stock indices trades automatically using this Indices Trading Margin Call.

What is 20% Indices Margin Requirement Level?

For 20% indices margin requirement before closing your stock indices trades automatically using a Indices Trading Margin Call, then your index trades will be closed once your trading account balance gets to $200 - at $200 you'll get a indices trading margin call.

What is 50% Indices Margin Requirement Level?

For 50% requirement of this level before closing your stock indices trades automatically using a indices trading margin call, then your transactions will be closed once your trade account balance gets to $500 - at $500 you will get a indices trading margin call.

What is 100% Indices Margin Requirement Level?

If the broker sets 100% indices margin requirement of this level before closing your open trades automatically using a Indices Trading Margin Call - at $1,000 you will get a indices trading margin call, then your stock indices trades will be closed once your trade account balance gets to $1,000: Meaning stock indices trades will close-out as soon as you execute a 1 standard stock indices lot on this stock indices trading account because even if you pay 1 point spread your indices trading account balance will go to below $1,000 & needed indices trading margin requirement percent is 100% i.e. 1,000 dollars, therefore your indices orders will immediately get closed using a Indices Trading Margin Call once your indices margin requirement falls below 100%.

Most indices brokers do not set 100% indices margin requirement, but there are those indices brokers that set 100% indices trading margin aren't suitable for you at all, even those who set 50% indices trading margin requirement are still not suitable. Choose those set 20% indices margin requirements, in fact, those indices brokers that set at 20% Indices Margin Requirement are some of the best because the likely hood they close-out your trade using a Indices Trading Margin Call is reduced as shown in the example above.

To Learn & Know More about Stock Indices Leverage and Indices Trading Margin - How to Read the Learn Indices Topics Below: