Leverage and Margin

Leverage

Leverage is the mechanism by which a CFD margin deposit controls a higher value asset, providing greater trading results and higher profits. Example: You deposit $ 1000, and your capital is $ 1000. The available leverage is 1:50. Then the amount that you can trade is $ 1000 x 50 = $ 50,000. The required securities (margin deposits) are displayed on each pop-up screen of trading operations. Leverage is a mechanism that is used to multiply profits; however, leverage can also multiply losses. Remember that the larger the leverage, the higher the risk of losing your investment. Using leverage can work both in your favor and against you.

Please note that margin requirements tend to increase in proportion to the value of the underlying trading asset.

What is a Margin Increase Request?

Your margin is monitored in real time, giving you the advantage of knowing your own positions at any time. The maintenance margin level is the minimum amount of capital required to maintain an open position. If your capital falls below the minimum amount, the J.Investment Company will automatically fulfill the Margin Increase Request and close all open positions until the capital on your account exceeds the established minimum minimum margin requirement.

Example of Margin Increase Request

You signed up and posted $ 10,000 by credit card:

  1. Capital: $ 10,000 (Deposits - Withdrawals + Profits and losses on open positions).
  2. Available balance: $ 10,000 (Balance + Profit and loss on open positions - Initial margin).
  3. Profit and loss = $ 0 (total profit and loss of all open positions, including daily premiums).

10:20 - You bought 200 shares of Google (contracts for difference) at a price of $ 540.00. The total purchase amount was: 200 x $ 540 = $ 108,000. The initial margin required for 200 Google shares is 2%: $ 2,160. The maintenance margin required for 200 Google shares is 1%: $ 1,080. If your capital drops Below $ 1080, you will receive a Margin Increase Request. J.Investment Company liquidates your open positions.

  1. Capital: $ 10,000 ($ 10,000 + $ 0).
  2. Available balance after the acquisition of Google shares is: $ 7,840 ($ 10,000 - 2% x $ 108,000).
  3. Profit and loss = $ 0.

13:00 - the price of Google shares fell to $ 510.

  1. Capital is $ 4,000 (- $ 6,000 + $ 10,000).
  2. Available balance: $ 1,840 ($ 10,000 - 2% x $ 108,000 + 200 x ($ 510 - $ 540)).
  3. Profit and loss = - $ 6000 (200 x $ 540 - 200 x $ 510).

13:15 - The price of Google shares fell to $ 495. You received a Request for a margin increase, and the J.Investment Company liquidated your position.

  1. Capital: $ 1,000 (- $ 9,000 + $ 10,000).
  2. Available balance: $ 0 ($ 10,000 - 2% x $ 118,000 + 200 x ($ 495 - $ 540)).
  3. Profit and loss = - $ 9000 (200 x $ 495 - 200 x $ 540).

You received a Margin Increase Request because your capital is $ 1,000 and you need $ 1,080 to maintain an open position on 200 Google shares. Therefore, the J.Investment Company has liquidated your position. Your current balance is:

  1. Capital: $ 1000.
  2. Available balance: $ 1000 (Deposits - Withdrawals + Profits and losses on open positions).
  3. Profit and loss = $ 0 (no open positions).

Initial Margin

To open a new position, your available capital in the account must exceed the trading requirement for the initial margin level. Margin levels vary depending on various financial instruments.

You can view the required overall margin level on the My Account tab on the left side of the trading platform page. Remember that your initial margin is constantly monitored in real time.

Maintenance Margin Level

To keep the new position open, the capital on your account must exceed the overall level of supported margin. Each financial instrument has its own requirements for the level of maintenance margin. The J.Investment Company always displays the maintenance margin level for each individual instrument.

You can view the required level of maintenance margin on the “My Account” tab on the left side of the main page of the trading platform. Remember that your maintenance margin is constantly monitored in real time.

Security features

To ensure your financial security, the J.Investment Company will automatically close positions on your behalf if additional margin is not provided. Remember that the larger the leverage, the higher the risk of losing your investment. Using leverage can work both in your favor and against you.

EASY AND QUICK ACCOUNT CREATION

It takes only 2 minutes to create a valid account on the site. You should hurry to open an account in order to get the maximum benefits from the partnership with the J.Investment Company now: a bonus system, a high degree of protection of client funds, as well as a variety of transfer methods for deposit accounts.

J Investment Consultants limited

BVI company number: 1926779

Wickhams Cay 2, Road Town, British Virginsky Islands

admin@ji.company

+44(203)-807-10-09