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No, of course not. The collateral is only blocked for withdrawal. And what kind of loan is it if you don't pay any interest on it?
But nevertheless it is a great way to get the client to drain their money faster.
Granting a loan :
You take out a loan from a bank, pledging a liquid asset (sometimes just a liability is enough).
You borrow 100k currency by providing a cash collateral of at least the leverage, for example 1k for a leverage of 1:100. (so the conditions of the loan are much stricter than in a bank)
The cost of credit :
In the bank, the percentage, as they say (and there are all sorts of other nasty fees).
For forex swaps, as a rule, are determined by the difference in the rates of the respective Central Bank, and the percentage is added in favor of the office that gives you the loan, plus sometimes a percentage of the turnover. (much less and more transparent than in the bank)
Repayment of the loan:
Both there and there refunded, all the markups paid and well.
Not the return of the loan:
Both there and there as soon as the outstanding loan exceeds a certain percentage of the pledged assets, you get "called" i.e. margin call and further stop out, i.e. your property is realised in favour of the lender.
So where is the difference?
We don't give anyone this collateral.
Second, the smaller the amount blocked for withdrawal, the higher the leverage.
It is a paradox: with high leverage the amount of collateral should be greater, but in fact it is less.
No, not credit.
No, of course not. The collateral is only blocked for withdrawal. And what kind of loan is it if you don't pay any interest on it?
That's what a loan is. Interest-free. And not always.
Interest-free is not a loan, it's a loan. But a loan means a transfer of ownership of cash or other assets from the lender to the borrower, subject to subsequent repayment. There is no transfer of ownership, so it is not a loan.
Gentlemen, margin trading is, by definition, trading on credit with collateral!
And all terms take or do not take interest on the loan (do not worry will take in one form or another, even from Islamic accounts :))) ) More or less collateral (do not worry, with bad trades losses will not exceed the amount of the deposit, although you can get out and at a gap to get a loss greater than the deposit). All this is just a lure for clients, because the office will always withdraw its percentage of these operations.
In my opinion this topic is fully exhausted only if another, cardinally different definition of margin trading is not given.
to FAQ
I thought you could.
Sorry for the off-topic, just did not want to ask in a separate branch: what you can read, which develops positive motivation and generally lifts the mood (went to the shop, in the psychology section, these books heaps), I would like a more structured or something. I do not know how to frame the question, but, I think, the meaning is clear. Thanks in advance.