Hi Arun,

Glad to hear from you.


Most trading firms set you up by default on either 100 to 1 or 50 to 1 leverage. So this would mean that a 200,000 position on 100 to 1 would require $2000 in margin and on 50 to 1 would require $4000. As long as your account equity did not drop below these levels, which in your example it would not have, then you would not get a margin call.

So basically here you want to differentiate between the leverage that you are using in your trading, the the maximum leverage that your broker allows you to use on your account before receiving a margin call.

Hope that helps. If there are any other questions or comments on this one please feel free to post them below.

Best Regards,
Dave

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Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.