WHAT IS MARGIN TRADING?



Margin trading allows you to take a position of much higher value than the monies deposited in your account. Your account balance is security against an adverse movement in the market.

Margin means leverage and leverage means there is potential to lose more than the monies you have deposited in your 168fx account. Margin comes in a number of different forms. Margin applies to all 168fx instruments and is made up of Initial Margin and Variation Margin.

Initial Margin is the minimum account balance required to open a position. Variation Margin is the unrealised profits or losses on open positions or transactions. Your total margin requirement is the sum of these two amounts and you must maintain at least this amount in your 168fx account at all times.


Leveraging



Every trader should know what level of risk they wish to take. Whilst the attraction of taking on a big position to receive increased profits is quite clear, it should also be noted that a slight movement in the market will result in a much higher loss in an overly leveraged account.

Traders always have the option of applying a lower level of leverage to an account or transaction. Doing so may help manage risk, but bear in mind that a lower level of leverage. will mean that a larger margin deposit will be required in order to control the same size contracts.