Trading glossary

Margin: meaning in trading

Margin is the deposit your broker holds while a leveraged trade is open.

When you open a leveraged position, the broker sets aside part of your balance as margin. At 30 to 1 leverage, a £30,000 position needs £1,000 of margin.

If losses eat into your free balance, you get a margin call, and below a set level the broker closes positions automatically (a stop out).

Using a fixed stop loss and small risk per trade keeps you far away from margin problems.

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