Margin Level
Margin Level is that the % relation of your account equity to used margin. It helps you to calculate the money you’ve got available for margin trading. the higher your margin level, the extra cash you have there to trade.
If your margin level drops below 100%, you cannot new spot positions on margin till your margin level is back over 100%. If your margin level drops to 80% or lower, your position is also forcibly closed, or “liquidated”. It’s your responsibility as a monger to proactively monitor your margin level.
How Margin Level Calculated?
Margin level is calculated as:
Margin level = (Equity ÷ Used Margin)×100
Equity is the total of your collateral holdings (or “trade balance”) plus/minus any gain or loss on open positions.
Example
If your account equity is $8,000 and your used margin is $2,000 then your margin level is 400%. Margin level is extremely necessary as a result of it tracks your margin commerce potential and also the overall standing of your open spot positions on margin. If it falls to 100 percent you’ll not be ready to open new positions, and if it falls more, a number of your spot positions on margin is also mechanically closed. If your margin level is obtaining about 100%, you’ll raise it, either by adding collateral funds to your account to extend equity or by closing some open spot positions on margin to cut back the used margin.