What is Margin?
Margin allows you to gain full market exposure but only with a fraction of the investment capital you would normally require.
Because CFDs are leveraged products, only a small amount from your capital is required in order to open your position.
What is a Margin Call?
A margin call occurs when, for example, a position you have is going against you. The Margin call will occur when a trading account no longer has enough equity to support the open trades.
Example: If you are using 200:1 leverage and you have a $20 account and use $10 to open a position, your trade size on the market would be $2000. Each pip would be worth approx. 20 cents. If the market moved against you by 50 pips, that would be a floating loss of $10.
Since $10 are required to keep your trade open, at a floating loss of $10.01, you will no longer have enough margin to keep your trade open and a margin call will occur. A margin call means that your broker might close your position to further protect your account.
The margin call at Fondex is at 50%
What is the Stop-Out Level?
“Stop-Out” level means when the margin level of your account falls to or below a specified amount and your trades are automatically closed. Stop Out levels help protect your equity andprevent your account from falling into a negative balance.
The stop out level at Fondex is 35%