Margin Call.

Since trading on the exchange almost always involves leverage, there's a risk of losing not only the trader's funds but also the broker's loan. To prevent this, dealing centers use their own stop orders to protect themselves from losses. One such order is the Margin Call.

A Margin Call is a specific loss threshold for a trade, upon reaching which the broker can decide to forcibly close all open orders early.

This order notifies the broker that the financial result of a losing trade or all open positions in the trader's trading terminal is approaching a critical point. After this, the brokerage company representative decides whether to terminate the trade early or continue monitoring it, depending on the forex market situation.

A margin call serves as a warning signal, but even if the order isn't closed, the borrowed funds remain securely protected by a mandatory stop-out level.

The standard margin call size typically ranges from 15 to 40 percent. It shouldn't be assumed that the lower margin level is preferable for margin trading. In practice, the opposite can happen, and early closure of a losing trade by forex dealing centers can sometimes save at least some of the trader's funds.

Joomla templates by a4joomla