What is the Difference Between Equity & Margin in Stocks?
Equity is the total amount of capital in a stocks trader's account while margin is amount of money required by your stocks broker so as to allow you to continue trading with borrowed amount that you have borrowed after using stocks 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 stock trades and because there are no open stock 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 stock trades is known as free margin.
To Know More about Stock Leverage & Margin - How Do You Read the Topics Below:
Stocks Leverage and Margin Explained
