FinFx-Pro trading provides margin based trading in CFDs, currencies, commodities, indices,
stocks & ETFs. Margin trading refers to the process where traders can trade or invest with more than what they can afford to.
What Is Margin?
Margin is the collateral amount required to open a position in any particular instrument. Margin is expressed as the percentage of total contract value. For example – 1%, 2% or 5%, if the margin requirement is 1%, that means trader require only $1000 to trade the position size of $100,000. As the margin percentage decreases, trader requires fewer amounts of funds to open a trade position.
There is no cost for marginal trading and it the benefit provided to clients by the brokers. Trading on leverage offers an attractive opportunity for clients, but be aware that margin trading can positively and negatively affect on the client’s account as profits & losses both get magnified.
What Is Leverage
Leverage allows investors to trade with bigger lot size. Margin and Leverage are inversely correlated to each other, the more is the leverage on particular account the lesser is the margin required to trade any particular quantity. For example- if account leverage is 50X then investor requires only 2% of total contract value to place a trade and if account leverage is 200X then investor requires only 0.5% of total contract value to trade.
FinFx-Pro Trading provides investors an opportunity to select from the range of account leverage option. It is important for investors to understand the risk involved in using high leverage. Investors are advised to select the account leverage to suit their risk capabilities.