Margin Call

A margin call will be issued to the trader by the PrimeXBT when their Available Margin equals or drops below the required margin amount.

Example:

Let us assume that a trader has an equity balance of $3,000 and has 100% Available Margin.

If a trader is leveraged 100:1 on a $100,000 position value, they have locked $1,000 as the margin requirement of 1%. Now the trader has only $2,000 in his balance which means his Available Margin is 66%.

If the trade goes badly and the value of the position drops to $98,000, the unrealized loss will be equal to -$2,000 which means available balance has been “eaten up” and Available Margin is now 0%.

The PrimeXBT system will now issue a margin call, and close the position at the current level.

If the trader is convinced the market will turn and the trade will finish in the money given time, they should add additional funds to their trading account BEFORE it reaches the margin call level.