How is free margin defined in the world of digital currencies?

3 answers

• Thanakit KaewwisateNov 01, 2025 · 4 months ago
  Free margin in the world of digital currencies refers to the amount of funds available in a trader's account that can be used to open new positions or cover potential losses. It is calculated by subtracting the used margin (the amount of funds currently being used for open positions) from the total account balance. This remaining amount represents the free margin, which can be used for new trades or as a buffer against potential losses. In simpler terms, free margin is like the available balance in your digital currency trading account that you can use to make new trades or cover any potential losses. It is an important concept to understand as it determines the amount of leverage you can use and the size of positions you can open. For example, if you have a total account balance of $10,000 and you have $2,000 being used as margin for open positions, then your free margin would be $8,000 ($10,000 - $2,000). This $8,000 can be used to open new positions or as a buffer against potential losses. It's important to note that free margin can fluctuate as the value of your open positions changes. If the value of your open positions increases, your free margin will also increase. Conversely, if the value of your open positions decreases, your free margin will decrease as well. Understanding and managing your free margin is crucial for risk management in digital currency trading, as it helps you determine the amount of funds available for new trades and the level of risk you can take on.
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• PRAKASH SMar 29, 2021 · 5 years ago
  Free margin in the world of digital currencies is the amount of funds available in a trader's account that can be used to open new positions or cover potential losses. It is an important concept to understand as it affects the amount of leverage a trader can use and the size of positions they can open. Free margin is calculated by subtracting the used margin (the amount of funds currently being used for open positions) from the total account balance. The remaining amount represents the free margin, which can be used for new trades or as a buffer against potential losses. Managing free margin is crucial for risk management in digital currency trading.
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• Atmajan MKSep 20, 2024 · a year ago
  In the world of digital currencies, free margin refers to the amount of available funds in a trader's account that can be used for new trades or to cover potential losses. It is calculated by subtracting the used margin (the amount of funds currently being used for open positions) from the total account balance. The resulting amount represents the free margin, which can be used to open new positions or as a buffer against potential losses. Understanding and managing free margin is important for traders to effectively manage risk and make informed trading decisions.
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