Margin requirements are to be strictly adhered to when trading with leveraged instruments. If margin requirements are not met and available capital drops below margin requirements, all open trading positions will be closed and liquidated.
Here are the margin maintenance conditions for all accounts;
If available capital in the trading account drops to 100% of all open positions margin usage, an e-mail will be sent to warn the client of the imminent danger as his account risk is over exposed.
For e.g.Trading Account Size : $1,000
After sustaining floating trading losses of $800,Available capital; $100 (100% of margin used)
Warning email is sent out.
If available capital in the trading account drops to 50% of all open positions margin usage, all open positions will be force closed, only returning 50% of the margin used.
For e.g.Trading Account Size : $1,000 Margin used for open positions: $500 Available capital : $500.
After sustaining floating trading losses of $250,Available capital; $250 (50% of margin used)
All open positions are force closed and liquidated, invoking a margin call situation. The client will be returned of the $250 as available capital.This measure ensures that client doesn’t lose beyond his trading capital.