What is “Margin” in currency trading?
Margin is collateral for a currency position. Our margin requirement is 1% for standard accounts. That means that with $1,000 a forex trader could trade $100,000. Fore mini accounts, the margin requirement is 0.5%; that means that the required deposit to trade a mini contract (which has a value of $10,000 – a tenth of a standard lot), is only $50. The amount of margin that forex traders could use is a lot greater than stock day traders have at their disposal. Increasing leverage increases risk. Do you perform margin calls? No, we do not perform margin calls. What is a “pip”? A “PIP” is the smallest increment that the price of a currency can move (last decimal place in a foreign exchange rate). It can be compared to the “tick” concept for stocks. “PIP” is an acronym for “price interest point.” See our free forex education section for more information. How can I get familiar with common trading terms such as “bid” and “ask”? You have various options to learn about the common terms used i
