What is leverage in the forex market? It’s the ability to buy and sell foreign currencies while putting up only a fraction—3% to 5%—of the notional amount. Leverage offers potential opportunity, but it’s also quite risky.
When used prudently, and with a full understanding of the risks, margin can be used to help diversify holdings and attempt to amplify return on assets. But it’s not for everybody. Margin also creates the potential for greater risk of loss from increased leverage.
Once you’ve mastered the basics of margin trading, you might want to learn how different trader and investor types use it. It can depend on your objectives, risk tolerance, and the products you trade.
A margin account can be useful for investment leverage. Did you know it can also be used as a convenient line of credit with a low interest rate and flexible repayment? But understand the risks.
Learn how experienced investors comfortable with the risk of margin trading can view a margin account as a “reserve fund.”
Learn how following short interest and other short-selling metrics can help investors can gain valuable insights on companies and markets.
Explore real examples of initial margin & maintenance margin calls. Dive into the mechanics of margin multipliers in futures contract margin.
Options expiration day can be a time of volatility, opportunity and peril. Trading and selling options on expiration day requires an understanding of the process, here are a few things you need to know.
Nobody wants his or her stock investments to be forcefully liquidated. Protect your portfolio with better estimations and risk management plans.
Know what you're getting into before putting on that option trade—avoid surprises by educating yourself about the risks and oddities of assignment.
Risk-based margin is both a blessing and a curse. But is it for you?
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