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Definition

Initial deposit of good faith to ensure the client commitment to the investment and ensure smooth business operational status, also the amount of equity contributed by a customer as a percentage of the current market value of the assets held in a margin account.
Margin Trading

Trading on margin enables a client to control a large foreign exchange position with a relatively modest-sized account.

A fixed margin amount is necessary to open a trade, or position. The minimum margin is $500, $1,000, $2,000, or $100,000 depending on the type of leverage. The client may choose to set the leverage at a higher level – a 1:50 leverage is often used.

Once a trade is made, the margin requirement is displayed as "Margin". If there were 500,000 of open trade, then the client would need to have in excess of five times the minimum margin requirement for such account.

Trading on margin has advantages and disadvantages. The major advantage is that the client need not lock up a large amount of capital, which could be put to work in other areas. The major disadvantage is the risk of a margin call.

Since high leverage imposes this risk, there are features embedded in the CFSA Trading Platform that can reduce the amount a client can lose in trading. The CFSA Trading Platform automatically calculates margin requirements, and checks available funds before the client can enter a new trade. If the account's Margin Level, as described below, ever falls below 50%, all trades will be automatically closed.
Account Balance: The value of account funds without taking into consideration profits or losses on open trades.
Account Equity: The "floating" value of account funds – after taking into account all profits or losses in open trades. If the client were to shut down all open trades, this value would be locked in and become the Account Balance.
Margin: The amount of account equity currently committed to maintain open trades, i.e., the client's deposit on the trade.
Free Margin: The account equity not currently committed to maintain open trades. It is available either to open a new trade or to act as a "cushion" against a margin call.
CROWN FOREX SA margin requirements

	Margin 100% or Leverage 1:1.
	Margin 2% or Leverage 1:50.
	Margin 1% or Leverage 1:100.
	Margin 0.5% or Leverage 1:200.

For more information please contact us at :

	TEL:		+41 32 420 70 70

	FAX:		+41 32 420 70 79

	Email:		info@crownforex.com