How is Stocks Margin Calculated? Stock Margin is equal to Used Stock Margin added to Free Stock Margin
Stocks Margin = Used Stock Margin + Free Stock Margin
What is Used Stock Margin? : amount of money in your trading account that has already been used up when buying a stocks lot, this contract is one that's displayed in open trades. As a trader you can not use this amount of money after opening a trade transaction because you have already used it and it is not available to you.
In other words, because your stocks 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 stocks leverage he has given you.
What's Free Stock Margin? : amount in your account that you can use to open new trades. This is amount of money in your account which hasn't yet been stocks leveraged because you've not yet opened a trade with this money - this money also is very important for you as a trader because it enables you to continue holding your open trades as will be explained below.
Example of How is Stocks Margin Calculated on MT4?
The stocks margin example in MT4 stocks Platform below, the set stock leverage ratio is 100:1, the stocks margin is equal to stocks used margin plus stocks free margin.
MT4 Stocks Leverage Margin Calculation - Stock Margin is equal to Used Stock Margin + Free Stock Margin
Stocks Margin - $16,116.55
Stock Margin is equal to Used Stock Margin + Free Stock Margin
$16,116.55 = $2683.07 + $13,433.48
Used Stock Margin - $2683.07
Stocks Margin used to open trades in MetaTrader 4 platform example above
Free Stock Margin - $13,433.48
Free Stock Margin that can be used to open new stock trades in MetaTrader 4 platform example above.
Stock Margin is equal to Used Stock Margin + Free Stock Margin
To Know More about Stock Leverage & Margin - How Do You Read the Topics Below:
Stock Leverage and Margin Explained
