Margin Trading (margin trading) makes it possible to trade currencies, without resorting to the real exchange rates. Commercial operations are done on a full netting - netting, without involving a real asset.

Margin (from the English - margin) - exchange and bank term with the meaning of amount for outstanding loans. Margin trading - a trade with the help of a loan from the broker companies under certain collateral.

The essence of margin trading is currency trading in order to obtain the difference in rates.

The implementation of margin trading in a client puts in the bank collateral - a margin which is providing arbitrage client, and thus the client on its operations can not lose

Another feature of margin trading is to provide leverage. Leverage - the ratio of the transaction amount to the value you've made a pledge.

For example, assume that your trading account is the sum of 1000 USD. Leverage - 100, ie 1% (a minimum margin). The maximum amount of the transaction with such leverage: USD 1000x100 = USD 100 000 That is, a trader should have in stock only 1% of transaction amount. Thus, leverage allows you to repeatedly increase the size of potential profits.

Margin client together with the obtained profit / loss is a variation margin. In this case, the variation margin may not be less than the minimum margin, otherwise the client will not be able to make transactions, and will be bankrupt.

Because of its speculative, each transaction under Margin trading involves two stages: 1-opening position; 2-closing position. Ie there is a full trade. And while the position is not closed the transaction in the opposite direction, the broker captures your position as open.

Forex trading is carried out by certain amounts - lots. If one lot is 100 000 euros, you can buy or sell 100 000 200 000 etc. euro, but 80 000 or 150 000 euro - you can not. Today, lots may be of two types: standard and mini. In this case, a mini-lot, as a rule, is 0.1 standard. The size of the necessary margin for a particular transaction is calculated as follows: 1% of transaction amount x amount of the transaction (lots). For example, the currency pair EUR / JPU, EUR / GBP, EUR / USD at 1.3425 and the euro amount of the transaction one lot, the margin would be $ 1,342.5.