Margin is the amount of funds required in order to trade. The amount of margin required depends on position size, the market price of the currency pair, and the leverage of your account.
For example, if your account balance is $20,000, your leverage is set to 1:1 and you want to initiate a position of 0.1 standard lots (or 10,000 units of currency) at EUR/USD at a market price of 1.45000 then minimum margin requirement would be the amount of $14,500.00.
In the above example the minimum margin requirement is calculated by converting 10,000 Euros into 14,500 US Dollars.
Using the same example, but with a leverage setting of 1:100, the minimum margin requirement would be $145.00.
The formula to calculate minimum margin requirement is
Minimum Margin Required = (Position Size multiplied by the Current Price) divided by Leverage
Position Size = 1 standard lot of EUR/USD (100,000 units)
EUR/USD = 1.45000
Leverage = 50:1
Minimum Margin Required = 100,000*1.45000/50 = 2,900 USD
A Margin Call is an alert generated by your trading platform when your account value (Equity) is equal to or less than a certain percentage of the Minimum Margin Requirement.
Please note that iBull Capital does not provide a margin call warning. Margin calls are triggered when your account equity has dipped below a certain percentage of required margin to support your open positions. This occurs when your floating losses reduce your account equity to a level that is less than your margin requirement. We advise all clients and traders to strictly adhere to margin requirements when trading. Minimum Margin Requirements on Open Positions must be maintained by the customer at all times. Any or all open positions are subject to liquidation by iBull Capital should be Minimum Margin Requirement fail to be maintained. Margin requirements may change at any time. iBull Capital will do its best to inform the client about any projected changes by email and via the trading platform’s message system at least a week before changes go into effect.
iBull Capital Trading platforms issue a margin call at 50% level. This means Margin Call will trigger when account value (Equity) is equal to 50% of required margin to support all open positions.
Stopout is the level at which iBull Capital trading platform automatically closes one or more open position to safeguard the client and the company’s interest. This will occur if your account value are equal to or less than a certain percentage of the Minimum Margin Requirement.
iBull Capital will liquidate a part or all of an Open Position in a customer’s account 30% level. This means Stopout will occur when account value (Equity) is equal to or less than 30% of required margin to support all open positions. Positions will be closed based on the best execution prices available at the time to iBull Capital.