Not having things like page limits instead of word limits, not having strict
margin limits for example, paragraph spacing.
Among these indicators were outflows from the large pool of global capital that has flooded emerging markets over the past few years, continued low global interest rates, rising Chinese debt levels and
relaxed margin limits...
And if you've maxed out
your margin limits and your account continues to drop in value, you risk a margin call, which would force you to cover your shorts, which you may not be able to afford.
However, we do know that you can't use Gold Buying Power for options spreads, and you must use
your margin limits or cash on hand to cover the maximum loss.
You also may have a «margin call» forcing you to liquidate assets if you go beyond
your margin limits.
@DavidSchwartz I would assume that is the case with most brokerages; you have to stay within
your margin limits or risk a margin call.
The forex trader must realize the potential losses of utilizing leverage prior to them establishing
their margin limits.
Obviously
the margin limit drops proportionately.
What happens if you are very near to
your margin limit (the maximum you're allowed to borrow) and suddenly all of your holdings drop in value?
It would be nice if the broker could be instructed to clear out the position for you, but in my experience the broker will simply give you the shares that you can't afford, then freeze your account because you are over
your margin limit, and issue a margin call.
The size of
a margin limits the maximum diseconomies that might occur in the result of unsuccessful trading.
Your margin limit is 50 %, so if the value of your securities ever dropped below $ 60k, you would get a margin call.
You now owe $ 25,000 and are below
the margin limit.