What is balance, margin, free funds, equity, margin level?

Written by Volodymyr
Updated 4 months ago

On the ArtCap trading platform, you have access to all important information about your trading account. This is where traders spend most of their working time. This is your working tool. 

There are several basic concepts related to the money in your account that you should understand. You can see them below in the photo marked with numbers.

 

1. Trading Account Number (sometimes ID) – your trading account number. By clicking on the account number, you will get an overview of all DEMO and LIVE trading accounts associated with your email address. Additionally, you have the option to open a new trading account.

2. Balance – balance of trading account. The balance of a trading account is the amount of money a trader has at the current time, excluding open positions.

3. Equity – equity of trading account.  Equity = balance of a trading account + result of current trading operations + swap – broker commission.  

4. Free funds - free funds of the trading account. Free funds means money that is not blocked as collateral and is available for opening a position. It is calculated as: Free Funds = Equity – Margin. 

5. Margin  is the collateral that a trader must deposit into their account to cover part of the risk that the trader creates for the broker. Or it is the amount of money needed to open a leveraged position or market contract. 

6. Margin level – margin level of the trading account. Your margin level percentage is a measure of the relationship between the equity in your trading or brokerage account and how much margin is in use. The margin level calculation is expressed as a percentage: (Equity / Margin) x 100. It's helpful to think of margin level as a reading of your trading account's health. 

We wish you successful trading with ArtСap !

                                                                  

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