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What is the Trade Deposit?

Q.  What is the Trade Deposit?

A. Leverage Trading on the Magnr platform requires a Deposit to be held against each position opened with the Exchange.

The Trade Deposit is used to cover any potential losses in the event the market moves against a given Trade Position.

Scenario - Liquidate Position;

  • Trade in Profit:  Deposit (Collateral) will be returned to you in full if the market moves in your favour.
  • Trade at a Loss: if the market moves against your Position, and automatically closes against the Trade Stop, losses are deducted from your initial deposit.  The remainder is returned to your account. 

Definition:

The Deposit Size is calculated by the following - 

Deposit = (Position Size x Volatility Multiplier)/Leverage

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