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Currency Trading - A standard unit of measurement for a FOREX

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A standard unit of measurement for a FOREX trade. One lot in a standard account is approximately equal to $100,000 currency. Whereas, one lot in a Mini account is approximately equal to $10,000 of currency.

What is margin?

The amount of cash deposit required in a clients account in order to open a position or to maintain an open position. Margin is essentially collateral for a position. If the market moves against a customer’s position, the client will be requested to deposit additional funds through a “margin call.” If there are insufficient available funds, IFX Markets will immediately close out the client’s open positions.

What is the margin requirement to make a trade?

The FOREX allows spot currency positions to be leveraged at various amounts depending on the broker up to 100:1 leverage is common. This means that a 1% margin deposit ($100) allows you to control $10,000 of currency in a 1 Mini lot position in the FOREX market. FOREX trading is conducted on “margin” which means that a cash deposit, usually much smaller than the underlying value of the currency contract, is required in order to trade. Margin available in your trading account is based on account equity, not account balance. The equity is the most accurate measure of the value of your account, as it takes into account unrealized gains and losses.

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Currency Trading - A standard unit of measurement for a FOREX

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