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Noob: The difference in BALANCE and MARGIN

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fathogg62
41
fathogg62  

Hey guys im a little confused on the difference.


If I went and opened an account with $500, is this my margin or balance?

Achmad Hidayat
15758
Achmad Hidayat  
fathogg62:

Hey guys im a little confused on the difference.


If I went and opened an account with $500, is this my margin or balance?


$500 is your balance. This is one of definition of them.

Balance is the amount of your capital left with the broker. Even when there is a trade is on, this balance amount will not fluctuate along with the floating profit or loss. If you have opened a position and liquidated it, the amount will be changed in accordance to your profit or loss amount.

Margin or used margin is the amount of money required to open a trade. Whenever you have opened a new trade, you will use up a certain amount of margin. As a result of that, the more trades you open, the more margin you will eat up.

Alain Verleyen
Moderator
33486
Alain Verleyen  
fathogg62:

Hey guys im a little confused on the difference.


If I went and opened an account with $500, is this my margin or balance?

Margin calculation.
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