Kamis, 12 November 2009

Balance, Equity and Margin Column


  • Balance : the total financial result of all fully executed transactions and deposits/withdrawals to/from an account.
  • Equity : the secure part of the client account, considering the open positions, bound with the balance and floating rate (profit/loss) by the following formula: Balance + Floating rate, the funds on the client account less the current amount for the open positions, plus the current earnings for the open positions
  • Margin : The required equity that an investor must deposit to collateralize a position equal to 1% (when leverage = 1:100) of an open position deposit.
  • Free Margin : the funds, which are not used for the security of the opened positions. It is calculated by the formula: Free Margin = Equity – Margin.
  • Margin Level : determines the condition of an account. Calculated according to the formula: (Equity / Margin) * 100%.
( In Fxopen, if the margin drop below this level is 5% then you will loss total and out money )

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