Quick question about margin calls

Still learning and then plan to demo trade for a long while, but I’m curious about margin calls.

Do brokers hold margin calls against you? If you get one or more margin calls do they close your trading account?

Or is it just a matter of depositing more funds in your account to continue trading?

Thanks
Nat

You can keep trading and deposit more if you feel like it. The margin call is just there to protect you and the broker from a situation where your account balance would go into the negative if you closed your trade.

Of course, getting a margin call is something you never ever want to experience and using stop losses and risking a reasonable percent of your account on each trade, it will never happen.

I have a quick question about some of the margin definitions at:

Margin: Forex Currency Trading Margins Defined

The section about “used margin” says:

[B]Used margin[/B]: The amount of money that your broker has �locked up� to keep your current positions open. While this money is still yours, you can�t touch it until your broker gives it back to you either when you close your current positions or when you receive a margin call.

I thought if you got a margin call you would lose the margin you put up for that trade (?)

According to the above you get it back. So where does the loss come out of then, the “account margin”?

Thanks

You’ve got it backwards. If you get a margin call you lose everything [I][B]except [/B][/I]your used margin. :slight_smile:

So if you have a $1000 account, and you place a trade that required $100 in used margin you will get a margin call once your trade goes $900 in the negative.

You’ll then be left with $100 out of your original $1000 account.

ahhh I see, thanks :slight_smile: