FAQ Section | Frequently Asked Questions
Margin is the security deposit that a broker retains when entering into a leveraged position. It is not a cost factor, but tied-up capital that is used to hedge open positions. The amount of the margin depends on the position size, leverage and instrument.
Example / association: A trader opens a position worth €50,000 with a leverage of 1:10. → He must deposit €5,000 margin for this. This sum is not freely available during the term of the position, but remains part of the equity.
Margin level is a ratio that describes the ratio of equity to used margin. It is expressed as a percentage and is used by brokers as a key risk indicator to assess how heavily a trading account is utilized. If the margin level falls below defined thresholds, margin calls or stop-outs can be triggered
Formula (implicit): Margin Level = (Equity ÷ Used Margin) × 100
Example / Association: An account has an equity of €6,000 and a used margin of €3,000. → Margin level = 200 %. If the equity falls to € 3,000 due to losses, the margin level drops to 100 %. Many brokers start imposing restrictions or warning mechanisms from this level onwards.
A margin call is a warning or intervention threshold that is reached when the margin level of a trading account falls below a value defined by the broker. The trader is informed that the available equity is no longer sufficient to adequately hedge the open positions. In this phase, new positions are often no longer possible.
Example / association: A broker defines a margin call at 100% margin level. If a trader's equity falls so far as a result of losses that it corresponds to the used margin, a margin call is triggered. → The trader must reduce positions, add capital or avoid further losses to prevent escalation
A market order is an unconditional buy or sell order that is executed immediately at the currently available market price. It guarantees execution, but not the price. Slippage can occur in volatile or illiquid markets.
Example / association: A trader wants to close a position immediately and places a market order. → Execution is immediate, possibly at a slightly worse price than expected - speed before price precision.
In real trading, concepts have an operational rather than a theoretical effect. Whether balance, equity or margin - every concept has direct consequences for scope for action, risk and possible intervention by the broker. Explanations of terms are therefore not an academic accessory, but an instrument for risk control. Those who misunderstand terms not only make poor decisions, but often systematically underestimate the actual exposure of their own account.
If you discover a technical term on the platform that is not immediately obvious in its meaning or is explicitly explained via the navigation elements, please let us know.