What's the Margin Requirement for 1:50 Leverage?
- If = 1:50 - Leverage
Then the margin requirement = 1/50 *100= 2%
If you as a trader have $1,000 dollars,
1,000* 50 = $50,000.
1,000 / 50,000 * 100= 2 %
(Simplify - your equity is $1,000 dollars after leverage you control $50,000 - $1,000 is what percent of $50,000 - it is 2% margin) that's your account margin requirement.
Your margin requirement is 2% - This means to open a trade you only need to deposit 2% of the position value & the rest of the money you'll borrow from your broker using the 50:1 leverage ratio.
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