What's a Oil Trading Margin Trading Account?
A Oil Trading Margin trading account is an account that allows crude oil traders to control a large amount of oil trade transaction using little of their own capital while borrowing the rest from their crude oil broker.
What is a Oil Trading Margin Trading Account?
Obtaining this margin account will enable you as a trader to borrow money from your oil broker to trade oil with.
The amount of borrowing power your oil trading account gives you what is called " oil trading leverage", and is usually expressed as a ratio - a ratio of 100:1 means you can control resources worth 100 times your deposit - oil trading leverage 100:1 means you can borrow 100 dollars from your oil broker for every $1 dollar in your crude oil trading account.
What this means in Oil Trading terms is that with 1% margin in your oil trading account you can control one standard lot or 1 contract worth $100,000 with a $1,000 deposit.
However, Trading this crude oil trading account increases both potential for profits as well as losses. In Oil Trading you can never lose more than you deposit, losses are limited to your deposits & usually brokers will close a transaction that extends beyond your deposited amount by executing what is referred to as a margin call. Oil traders must therefore try to keep their margin requirement level above that required. By using oil money management guide-lines and keeping your used oil trading leverage below 5:1.
To Know More about Oil Leverage & Margin - How to Read the Topics Below:
Oil Trading Leverage & Margin Explained
