Margin trading systemThat the system of margin trading is a system that gives you the possibility to trade goods worth more than your capital times.
Is this type of trading to deal with private companies are doubling your capital several times as it allows you to trade a commodity exchange for a discount as a fraction of its value as a token of the user.These companies are not about sharing profit or loss where there is only asking you to pay the full value of the item sold and after the implementation of its mandate is limited to buy and sell orders that you set a price that you choose.
If the item ordered it to sell at a higher price than the purchase price will be implemented and it deducted the value of Item is complete and you will return your deposit plus full profit as if you actually have the item. The item ordered it to sell at a lower price than the purchase price will be implemented and it will be deducted from your account to have the value of the item is completed in full.
Before you do any selling or buying process will open an account with this company and will deposit the amount of money. This amount will continue to be without prejudice to decide to buy a commodity traded by the terms of your account will be divided into two parts:Sidelines of the user will be deducted according to the equation:Used margin = the number of contracts * contract size / ratio multiplier.The available margin is calculated by the equation:Margin = Equity - Margin userAnd have used margin is the maximum amount that can be lost in the transaction.Now we return to our previous example:I've purchased a car from the car agency at $ 10,000 was deducted $ 1000 from your account as margin and the user remains in your account the amount of $ 2000 is available as margin.Now you have a car in your name you can sell in the market .. And keen to make a profit selling them at more than $ 10,000.Now go to the market and looking for a buyer of the car at a higher price of $ 10,000 .. is not it? No .. Not the case ..!!
We will assume that the method of buying and selling cars in your country are in a public auction in which all who wish to participate by buying, selling and where the price of cars on the change according to supply and demand.If the number wishing to buy cars on the number of vendors will increase the price of cars and will continue to rise as long as there are a greater number of buyers.If the number wishing to sell cars for a number of buyers will drop the price of cars and will continue to decline as long as there are a greater number of sellers. Now you have a car would like to sell ..Will go to this market and will monitor the price of the car on the market that determines depending on supply and demand in the market, your car is desirable and there are a lot of people are willing to buy them will increase their price from $ 10,000 to $ 11,000 for example, and if there is more demand for them may increase the price to $ 12,000.Here you learn that all you have told Auto shot is the amount of $ 10,000, a price that the car I bought it, I sold the car at the current market price of $ 12,000 which will be the winner no doubt.So when the price of the car $ 12,000 in the market to order an agency cars to sell the car in your name with this price, we will implement the agency it will sell the car at $ 12,000, will deduct $ 10,000 full value of the car that prompts you to him and will bring you your deposit which opponent margin user will add profit is $ 2,000 to have your account (12,000 $ - $ 10,000) and will become your account now has $ 5,000 ($ 3,000 original account +2000 U.S. dollars profit from the deal).You can withdraw that amount or withdraw part of it, as you can return the ball again.In all cases share a soundly this night ..!!In exchange for that were deducted from the amount of $ 1000 profit on your account got $ 2000, an increase of 200% of the capital .. Note that capital was not more than a token was returned after the completion of the deal ..!!
But what if I went to the market and found that the number of vendors more than the number of buyers? And that there are not many who want to buy your car?Price of the car will drop from $ 10,000 to $ 9500, for example. This means that if you sold the car at the current market, you will lose $ 500.Where if you had ordered the agency cars to sell the car when he became the price of the market $ 9500 will implement it and you'll get $ 9500 and will be deducted from your account with $ 500 for the complete value of the car is complete, and will you deposit you paid a margin user and thus your account to have = $ 2,500 (3000 original account $ - $ 500 loss).Of course you do not like this .. Believe me, no one wonders ..!!So wait in the hope that the demand for your car and return the price to rise. But what if demand has not increased, but increased supply?!! Your car will drop the price more than $ 9500 to 9000 $.Here, ordered the agency to sell your car at the current $ 1000 will be your loss St_khasmha Agency of your account and your account will remain at $ 2000.Will wait for more ..But the price is still in the drop will reach to $ 8000 for example.
What will happen here?You can probably have to wait for more price goes back up. The agency, however, cars will not wait for a moment ..!! It monitors the price of cars in the market and watched you entirely ..!!They will not allow that the price drops more than that ..Why?Because the amount you have available margin = $ 2,000 which, as I learned the maximum amount you can afford to lose in this deal.When the price of cars in the market to $ 8000 even decided to sell your car at this price the company will be able to complete the rest of the price of the car and the deduction from your existing account to it, they can discount $ 2000 in margin available to you.But if the price of cars less than $ 8000 means that your loss will be more than $ 2000 then if you decided to sell the car will not be able the agency to complete the rest of the value of the car of your account and that where there is no margin available only $ 2000 only .. here will bear the agency is part of the loss.
This does not allow it .. never!!Everything that you can lose is the amount in the margin you have available. But what will happen when the price of the car in the market to $ 8000? You will come from the agency so-called margin call Margin Call.It is a warning that prompts you when the company either to sell the car immediately or add more money to the margin you have available. What is this?We mean that the agency monitors the price of cars cars all the time and with any change in the price of cars in the market assume that you sell the car Stamrha it. And is always keen to assume the loss is complete and you are not. As it is not about sharing the profit is not about sharing the loss.When the price of the car market in the $ 9000 is not a problem for the Agency cars, because if you ordered it to sell the car at this price you will be able to complete the value of the vehicle deduct $ 1000 of margin you have available.And when the price of the car market in the $ 8500 is also not a problem where the difference can be deducted from the margin available if ordered to sell the car at this price.But when the price of the car market in the $ 8000 if ordered to sell the car the price difference will be deducted from your available margin is the margin available to all who have = $ 2,000If the price falls more - even a penny - will not be able to complete the car value of the discount from your account.If we assume that the price of the car in the market has become = $ 7500 if you sell the car at this price will be your loss = $ 2500Sale price - purchase price: 7500 $ - $ 10,000 = $ --2,500Can deduct all the available margin that you have a $ 2000 and $ 500 will not be able to be covered from your account and will bear the loss.So when it becomes:The current market price - purchase price = margin availableCEATEC margin callWhat you have to do then?You a choice of two:Either to order the Agency to sell the car at this price any sell at $ 8000 and it will implement the Agency's order and deduct the difference from the margin available to you and it deducted $ 2000 and had thus completed the Agency the full value of the car ($ 8,000 current market price +2000 U.S. dollars the amount deducted from your account) and thus You re-deposit margin paid user becomes in your account with $ 1000 ($ 3,000 original account $ --2,000 amount deducted)And be your loss in the deal is the $ 2000 incurred by you in full.If you do not want to sell at this price and you want to wait any longer may re-price rise, you should add more money for the margin you have available.If we assume that you add the $ 1000 will be available on the margin Margin = $ 3000Even if the price dropped to $ 7000 car will be able to complete the Agency the full value of the car in case of a sale at the current rate.But what if the price of the car in the market to $ 8000 and I received a margin call Iba car did not add more money to my account? What will happen?Agency will sell cars that the car in your name at $ 8000 and will not be waiting for you.Will be covered so on their own .. You like it or not ..!! Fajova more of the low price will sell the car at $ 8,000.As we have said it will not allow you to lose more than the amount in the margin you have available.
Called the moment the agency to sell the car out of fear that the loss is borne by the moment of closure forced Auto Close.This behavior just does not doubt ..When the rising prices of cars you will get the full profit for yourself will not only be required to pay the full value of the car .. It is only fair that if the agency does not bear the loss incident for lower prices .. they are not about sharing profit or loss.If you understand the previous example, I understand the principle upon which the margin trading system Trading in Margin Basis.The system of margin trading is an opportunity for many people to enable them to trade more than the size of their capital several times while retaining the full profit as if they actually have the item and thus can store to get huge profits, a rate can not be obtained any other type of investment.Many are the people who have the efficiency to engage in the business world, but their problem is they do not have large enough capital that enables them to work. Trading system marginal Deluxe interested in what is capital!!You can understand the trading system marginal like a loan that the institution that deal with them .. where lend Foundation item that you want to trade in return for payment for a fraction of its value as a token of a redeemer, to reconsider the value of the item after it sold without you share a profit or loss.To ensure that does not take this item and run away without the return of remains of this item of the institution are reserved in your name, where you can sell them to order order company that sells at a price that you see you are appropriate, whether profit or loss should not exceed the value of the loss for the amount in your account at the institution and that you will use the Foundation to cover the loss that I got to recover the full value of the item with no loss in all cases. Will be able to trade in different types of goods and sizes may exceed 200 times your capital ..!!But before moving on to the margin trading system in the world market .. We will return to some of the concepts so make sure you understand the basis upon which this type of trading.