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.
The Deposit Size is calculated by the following -
Deposit = (Position Size x Volatility Multiplier)/Leverage