What is Difference Between Equity and Margin in Commodity Trading?
Equity is the total amount of capital in a commodity trader's account while margin is the amount of money required by your commodity broker so that to allow you to continue trading with the borrowed amount that you've borrowed after using commodities trading leverage.
If there are no trades then the equity is equal to free margin - this free margin is the amount available for opening new commodities trades and because there are no open commodities trades then this free margin is equal to the equity in the trader's account.
When a trader opens new trade transactions using part of their equity then the margin used to open trades is known as used margin and the part of their equity that has not been used to open commodities trades is known as free margin.
To Learn More about Commodity Leverage and Margin - How Do You Read the Topics Below:
Commodities Leverage & Margin Tutorial
