Margin call discrepancy

This is what the School has to say on margin calls:

[I]As soon as your Equity equals or falls below your Used Margin, you will receive a margin call. [/I]

I am not sure why the school says this because brokers set their own rules for when margin calls happen and a far different situation seems to be the case with my situation with Oanda. This is their margin call policy:

[I]The Margin Used (that is, the margin requirement of your open positions) divided by two must always be less than the Net Asset Value of your account.[/I]

So in my case, and I have posted a screenshot of the account summary here,

://i35.tinypic.com/fk1mk0.jpg (please add the http)

the margin used for my position is $5950, and that divided by 2 = $2974, which is what the platform tells me is my margin call point. Since my equity is $5882, I am a long ways from a margin call with Oanda, but already past margin call territory according to the school, so I am confused. My equity is already below my used margin, and still no margin call. :confused:

Pippy

As you have already noted, brokers have different margin rules. The school lesson is based on one set of rules only. Always go with what your broker says since they are the ones actually doing the margin calling.

Hello,

John’s answer pretty much addresses your issue.

Some brokers will margin call you when your available equity or free margin is zero. Some brokers will notify you when your available equity or free margin reaches a certain minimum percentage e.g. 30% and margin call you if you don’t close some positions or add funds to your account within a certain time period after the notification was issued.

The bottom line though: if you’re facing a margin call you either have the WORST trading system in the world OR (and this is the more likely scenario) you don’t have money management rules in place (and if you DO have money mangement rules in place then you’re not following them)!!!

Regards,

Dale.