Home » Resources » Leverage & Margin

Registered Address:

PYX Markets Ltd
55 Gower Street, London, WC1E 6HQ

Support & Sales:

+44 203 598 6855

Both leverage and margin are fundamental to your trading account with PYX MARKETS.

LEVERAGE

Leverage is what enables you to take what is a small amount of capital and trade much larger amounts. With a 1:100 leverage you could deposit €1,000 and make a trade for €100,000. You should know of course that this means a small price movement can have a proportional benefit and of course loss to your account. Trading results are achieved at an accelerated pace and profit and loss opportunities are increased by increasing the return on equity

The leverage offered on your account is affected by your account balance and also the type of products you trade. The default leverage for a small FX trading account is 1:400, but if you had a much larger account and were trading a less liquid currency pair or CFD for that matter, then the leverage offered would be considerably lower. Low-risk traders prefer a low leverage level, a high leverage level is usually used by high-risk traders. PYX MARKETS offers high leverage in many cases but you can choose for a more conservative leverage should you so wish. Just let us know.

The below are our base margins. Some products have different margin requirements; for example CFDs and less traded more risky FX currency pairs. For more information, please feel free to ask.

MARGIN

Margin is collateral that the holder of a financial instrument has to deposit to cover some of the credit risk of their broker. If a trader opens a position, margin is charged to the trader account. The margin is only a fraction of the whole contract value and must be deposited to open a position. You can calculate the margin for any trade by dividing the trading amount through the leverage. With a leverage of 1:400 and a trading position of 0.01 lot (1,000€) the margin will be 2.5€.

When a trading account no longer has enough money to support the open trades because of too many floating losses a margin call happens. This usually happens when the investor’s equity in the account drops past a certain point, say 50% of the total purchase amount. As a consequence the trader must deposit more cash or close some of the positions to offset all or part of the difference between the actual currency rate and margin within a few days.

For example, if a trader is using 1:200 leverage and has a 20€ account and uses 10€ to open a trade, his trade size on the market would be 2000€ (10 x 200). Each pip would be worth around 20 cents (0.0001 x 2000). If the market moved against him by 50 pips that would be floating loss of 10€ (0.005 x 2000). Since it takes 10€ to keep your trade open, at a floating loss of 10.01€, the trader will no longer have enough margin to keep his trade open. At that point the broker will automatically close his trade because the trader no longer has enough margin to keep that 2000€ trade on the market.

Account Size Leverage Trade-out level
< 5,000 1:400 50%
5,000 − 25,000 1:200 50%
25,000 − 100,000 1:100 50%
100,000 + 1:50 50%

If you trade on MT4 then you will receive notifications by email to the address we have on file for you once you are on margin call at 100% and then again stop-out notification at 50%.

If you trade on Tradable then you again receive both these mails, but at diferent levels, 150% and 100%.

If you trade on WebTrader then you receive pop-ups in your platform but not emails. These popups are at 50% and 30%.

It is your responsibility to know the financial standing of your account at all times and be aware of the consequences of having insufficient free margin on your account.