How is Oil Trading Margin Level Calculated?

We shall first explain the various oil trading margin trading terms used in oil platforms and then explain how oil trading margin level is calculated using an example on MT4 platform.

Oil Trading Margin, Margin Required, Equity, Used Crude Oil Trading Margin & Free margin

What is Margin Required? : It is the amount of money your oil broker requires from you to open a position. It is expressed in percentages.

What is Equity? : It is the total amount of capital you've in your account.

What is Used Crude Oil Margin? : amount of money in your account which has already been used up when buying a oil lot, this contract is the one that's displayed in open trade positions. As a trader you can not use this amount of money after opening a trade order transaction because you have already used it & it isn't available to you.

In other words, because your oil broker has opened up a position for you using the capital you've borrowed, you must maintain this usable margin for your account as a security to allow you to continue using this oil trading leverage he has given you.

What is Free Crude Oil Trading Margin? : amount in your account that you can use to open new trade positions. This is the amount of money in your trading account that has not yet been oil trading leveraged because you have not yet opened a trade with this money - this is also very important for you as the because it enables you to continue to hold your open trades as will be explained below.

Example of How is Oil Trading Margin Level Calculated in MetaTrader 4?

The oil margin examples in MetaTrader 4 oil trading Software below, the set crude oil leverage is 100:1, the oil margin which is 1% is $2683.07, therefore the total amount controlled by the trader is: $268,307 - this is because with this leverage the trader has used little of his money & borrowed the rest, with this set at 100:1, the trader is using 1 % of their capital, this 1% is equivalent to $2683.07, if 1% is equal to $2683.07 then 100% is $268,307

How is Crude Oil Trading Margin Level Calculated?