What is Difference Between Equity & Margin in Oil Trading?
Equity is the total amount of capital in a oil trader's account while margin is amount of money required by your oil broker in order to allow you to continue trading with the borrowed amount that you've borrowed after using crude oil trading leverage.
If there are no trades then the equity is equal to free margin - this free margin is the amount available for opening new crude oil trades and because there are no open crude oil trades then this free margin is equal to the equity in the trader's account.
When a trader opens new trade transactions using part of their equity then the margin used to open trades is known as used margin and the part of their equity that has not been used to open crude oil trades is known as free margin.
To Know More about Oil Leverage & Margin - How to Read the Topics Below:
Crude Oil Trading Leverage & Margin Explained
