What's Margin Level in Oil Trading?

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

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

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

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

What is Used Crude Oil Trading 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 trades. As a trader you can't 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 have borrowed, you must maintain this usable margin for your trading account as a security to allow you to continue using this oil leverage he has given you.

What is Free Crude Oil Margin? : amount in your account that you can use to open new trades. 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 a investor because it enables you to continue to hold your open trades as will be explained below.

Example of What are the Oil Margin Levels in MetaTrader 4

The oil margin example in MT4 oil Software below, the set crude oil leverage ratio is 100:1, the oil trading 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 and borrowed the rest, with this set at 100:1, the trader is using 1 % of their trading capital, this 1% is equivalent to $2683.07, if 1% is equal to $2683.07 then 100% is $268,307

How is Oil Trading Margin Level Calculated?