Margin
Your margin is the amount of collateral required for you to take on a trade. It allows traders to take on leveraged positions with a fraction of the full equity necessary to fund the trade. In the equities markets the margins required are usually
higher. The margin in a Forex account may
be set as low as 1%, effectively allowing leverage up to 100 to 1, or control of $100,000 in currencies for every $1,000
as margin.
The currency denomination of the margin depends on the brokerage the investor is trading through.
The positions held by an investor are valued continuously. If the funds in his margin account drop below the minimum required to support his open positions, then the broker would liquidate all
or some of his positions.
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