You need to understand how your account valuation works, so you will know at any moment the status of your funds and overall overview of the account. On Gemstone Holdings Webtrader, there are various calculations which can be found at the top of the platform screen. The calculations consist of:

🡪 Balance – the current cash balance on your account
🡪 Profit/Loss – The total profits/losses of all the positions you keep open
🡪 Margin – The part of the capital, put aside to cover margins for open positions
🡪 Margin % – You available capital, as the percentage of your margins
🡪 Equity – The most accurate status of your account, the live balance

Once you start being active, trading with your capital, open and close positions, these values will change every moment you perform an action.

Margin is the amount of capital you put aside from your capital available, to act as a secure deposit on the position you are willing to open. Keeping capital aside helps you have enough equity available to cover losses if this scenario happens. Once a position is closed these funds will update the total capital available, by making the difference between the total equity and margins used for the winning or lost positions.

How to calculate margins – DAX 30 example

🡪 You choose to open a position of 50p a point spread bet on the DAX 30, which is trading at a price of 12,000$
🡪 The margin required in percentage is 5% of the exposure on the trade
🡪 Your exposure in real value will be 50p x 12,000 = $6,000
🡪 So, the margin required to cover the position you are willing to open is 5% of $6,000 = $300

What is a margin call?

A margin call is received at the moment your account results to have very few funds, which cannot cover the minimum margin required to keep trading. This is caused by any decreased open positions because of the fluctuations in asset prices.
If your account balance drops below 50% of the margin amount, then positions will be automatically closed out to bring your account into the 100% balance. There is no time limit for your account to be in a 100% margin call, meaning if your TFA reaches 0, you will get a notification, however you are not limited in time when you decide to act.