One tiny question

hi,

i would like to ask a question regarding the margin. when i trade 0.01 lots, i can trade 100K with 1K on the acc. when my trade goes wrong, a margin call may occur. if i don’t fulfill it, the trade is lost and also the 1K. but, when the broker loses 100K because of my bad trade, why is it that they only charge my 1K?

thanks! alex :wink:

1st of all its unlikely your broker will allow you to open a position with 0 balance in main account. Theoretically When you buy a position worth of 100K with 1% margin which is USD 1,000 you can sustain losses close to USD 1K however if your loses reach to close to USD 1K the brokerage firm will automatically liquidate your position to prevent further loses. In your example the brokerage firm is buying a position worth 100K and not sustaining 100K loss. How long your position remains open depends on how much money you have in your main account minus your open position.

got it. thank you very much! appreciate it! :slight_smile:

Broker never lose. Whatever lose can occur they take it from your account. Leverage is for you to open the position, deposits are only for loses covering.

Regards.

is it possible to get an “obligation to pay further capital” or do forex broker use the margin call nowadays? i heard that you can loose much more than your invested capital. that would be horrorful. do forex broker guarantee to “just” eat up the margin when the market goes against me? like an cost-airbag?

best regards

you can lose more than you have in your account. in some cases when price moves a ton of pips in a click time brokers don´t have time to liquidate orders at margin call not ever at SLs or TPs… if someone are over leveraged on this kind of situations they would probably lost more than they invested

i see, but some brokers offer an insurance or they guarantee, that you won’t loose more than the margin. i am having a very hard time to choose a broker…days of reading and comparing. its boring.

thanks :slight_smile: