At Eurotrader, margin trading allows clients to maximize their trading potential while maintaining flexibility in managing their capital. 

When placing a trade, you may notice that the required margin is higher than expected. This is influenced by several factors, including trade size and leverage. Here’s why your margin requirement might be higher than anticipated:

1. Trade size affects margin

Explanation:
Larger trades require more margin to ensure you have enough capital to cover potential losses.

Example:

• Trading 1 lot (100,000 units) in forex with 1:100 leverage requires a $1,000 margin.
• Increasing the position to 2 lots doubles the margin requirement to $2,000.

2. Lower leverage increases margin needs

Explanation:
Leverage determines how much capital you must provide. Lower leverage means a higher margin requirement.

Example:

• With 1:50 leverage, a $100,000 trade requires $2,000 in margin.
• With 1:500 leverage, the same trade needs only $200.

Understanding margin requirements helps traders manage capital effectively. Always check your broker’s margin policies and use leverage wisely to minimize risk.

Need more details? Our support team is always here to help.

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