What Happens if You Get a XAUUSD Margin Call?
A margin call occurs when a xauusd trader's account free margin goes below the required margin level that's set by the broker. This means that because the free margin in the trader's account has gone below the required margin level then the trader gets a margin call and some of the open trades or all of the open trades in the trader's are closed by the broker until this trading account margin requirement level goes back up to a region above the required trading margin percent level.
Some of the open trades may be closed out or all of the open trades might be closed-out if this margin call is automatically executed by the broker.
What's XAUUSD Margin Requirement Level?
Now if Your XAUUSD Leverage is 100:1
When trading if you have $1,000 & use xauusd leverage option of 100:1 and buy 1 standard lot for $100,000 your margin on this trade is $1000 dollars in your xauusd account, this is money which you'll lose if your open trade goes against you the other $99,000 that's borrowed, the broker will close the open xauusd trades automatically using a Gold Margin Call once your $1,000 has been taken by the gold market.
But this is if your xauusd broker has set 0% XAUUSD Margin Requirement before closing your gold trades automatically using this Margin Call.
What is 20% XAUUSD Margin Requirement Level?
For 20% margin requirement before closing your gold trades automatically using a Margin Call, then your transactions will be closed once your account balance gets to $200 - at $200 you'll get a margin call.
What is 50% XAUUSD Margin Requirement Level?
For 50% requirement of this level before closing your gold trades automatically using a margin call, then your transactions will be closed once your account balance gets to $500 - at $500 you will get a margin call.
What is 100% XAUUSD Margin Requirement Level?
If the broker sets 100% margin percentage level requirement of this level before automatically closing your open trade positions automatically using what is known as a margin Call - at $1,000 you will get a margin call, then your gold trades will be closed once your account balance gets to $1,000: Meaning the gold trades will close-out as soon as you execute a 1 standard lot on this xauusd account because even if you pay 1 pips spread your xauusd account balance will get to $990 and the needed margin requirement percentage is 100% i.e. 1,000 dollars, therefore your xauusd orders will immediately get closed using a Margin Call once your margin requirement falls below 100%.
Most xauusd brokers don't set 100% margin requirement, but there are those xauusd brokers that set 100% margin percent level requirement aren't suitable for you at all, even those that set 50% trading margin requirement level are still not suitable. Choose those gold brokers that set their margin level requirement at 20% trading margin level, in fact, those gold brokers which set their margin requirement at 20% XAUUSD Margin Requirement are the best because the likely hood they closeout your trade using a Gold Margin Call is reduced as shown in the example above.
To Learn and Know More about Gold Leverage & Margin - Read the Topics Below:
Gold Leverage & Margin Discussed
