call happens when a broker demands that an investor deposits additional money or securities so that the margin account is brought up to the minimum maintenance margin. 2,000 Usable Margin divided by 80/pip 25 pips Lets say you bought 80 lots of EUR/USD.2000. If you have any questions about margin on large positions please contact. Let us paint a horrific picture of a Margin Call which occurs when EUR/USD falls. Leveraging your account to the highest 200:1 ratio means that even with a slight drop in the currency exchange price can wipe out your account's usable margin (balance).
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Jesse Livermore, to get a grasp on what a margin call is, you should understand the purpose and use. As you can see, your Usable Margin is now.00 and you will receive a margin call! Before proceeding further, if you are unsure about what is margin, leverage, used margin, and usable margin then follow this link to our previous tutorial: What is Forex Leverage and Margin? Trader B snapshot is to show you the quick peril you can find yourself in when over leveraged. How They Affect your Trades? After the margin call this is how your account will look: EUR/USD moves 25 pips, or less than.22 (1.2000.1975) /.2000) X 100 and you lose 2,000! Eurusd, you would be required to put up 800 for margin in an UK account leaving 9,200 in usable margin. The sad fact is that most new traders dont even open a mini account with 10,000.
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