Tag Archives: Margin

Let’s See The Margin in Forex

Despite the fact that Forex brokers agree to the point of traders to buy and sell on currency pairs ten times more than what’s been truly invested and brokers are aware of the fact that traders never loose currency beyond their actual investments. At this moment Margin act as the warranty.

Margin points to that amount at the trading which is actually required by the traders to be kept as balance at the Forex account for dealing with any kind of losses that may take place during trading.

This helps the traders to get prevented from the loosing the money that they don’t have still by taking added leverage they add-on to their losses and margin operates until the trading position is active and allow trading until traders have enough balance amount in their Forex account.

As soon as the balance amount finishes up the margin call announces and points that the trading limit is over and traders should exit the Forex trading platform.

The amount of margin varies from Forex broker to broker as some of them require 0.5% and other require 10% of marginal account depending upon the leverage amount offered by the Forex brokers.
For instance, at the leverage amount of 20:1 a trader requires a 5% of the value of each open trade position in the Forex account for maintaining the balance in the account to make further position with the desired currency pairs. This amount is equal to the $500 on holding a position of each lot of 10,000 units, thus, $10,000*5%=$500 as per the calculation.

Available margin, free margin and usable margin are the synonyms used by the different Forex brokers controlling the allowance for your trading enthusiasm.

The trader cannot open trading positions that surpass the available margin and maintain the previous trade positions operating if usable margin is drained out are equal to zero. Also, if the whole available margin is exhausted then the trader will receive the margin call.

The maintenance, required or used margin are the synonyms that can be used interchangeably that suggest that the funds, which are in use are currently locked in to sustain the currently open trades.

The margin call occur when due to losses trader’s Account Equity balance the total of the floating profit and loss becomes equally important to the used margin value or that can be waved off beyond it.

Thus, it can be concluded that the margin call helps traders to manage their trading accounts without expending unlimited.

Forex Margin Trading – Employing Leverage to Maximize Profits

Forex margin trading is a way of applying leverage to the purchasing power of your money to increase profits. Leverage simply means using a small amount of money to control a much larger sum. This is possible because it is unlikely that the value of a currency will change by more than a certain percentage over a short time. So you can place a few hundred dollars in your brokerage account to trade on margin – the amount you think the price will fall. Your broker will effectively lend you the balance.

Trading on margin is also known in the stock and futures markets, but because of the special nature of currencies, you can apply much more leverage in the Forex market. Depending on the broker’s terms, you may be able to control 50, 100 or even 200 times your account balance.

This can lead to big profits if you are successful, but it could also mean considerable losses if not. Generally, the more leverage you use, the more risky your trading is.

We understand leverage and margins by considering an example.

Imagine that the current rate on the British pound to US dollar Forex market is shown as GBP/USD 1.7100. So to buy one British pound you would need $1.71. If you expected the value of the dollar to rise against the pound you might decide to sell enough pounds to buy $100,000. If your broker used lots of $10,000 each, this would be 10 lots. Then you would sit back and wait for the price to go up.

A few days later you might find that the price had moved to GBP/USD 1.6600. Sure enough, the dollar has risen and the pound is now worth only $1.66. If you sell your dollars now and buy back into pounds, you will have made a profit of 2.9% less the spread. 2.9% of $100,000 is $2,900, so that would be an excellent trade.

But most of us do not have $100,000 extra money that we want to trade on the currency market. So here is where the principle of Forex margin comes into play.

Because you are buying and selling currencies at the same time, your money just has to cover any losses that may occur if the dollar falls instead of rising. And you would put a stop loss in place to minimize losses, so $1,000 can be all you need to have in your account to make this $100,000 purchase. Your broker guarantees the other $99,000.

In fact, many brokers now operate limited risk amounts, and the account will automatically close the deal if whatever funds you have on your account are lost. This prevents the margin calls that could be disastrous for a trader, because they mean that you can lose more than you have. But with a limited risk Forex account that is not a possibility. Broker software that you use to manage your account will not let you lose more than your account balance.

Using leverage in this way is so common in currency trading that you will do it without even thinking about it. Still, it is important to consider the risks. Lower leverage is always safer, and you may never want to go to the maximum Forex margin your broker will allow.

Semiconductor Revenue Expands by Record Margin in 2010

Semiconductor Revenue Expands by Record Margin in 2010 The global semiconductor market will achieve the largest dollar increase in its history in 2010, courtesy of a boom in DRAM and NAND sales that is benefiting memory suppliers, according to a preliminary forecast from the market research firm firm iSuppli, now part of IHS Inc. (NYSE: IHS). Worldwide semiconductor revenue will amount to $304 billion in 2010, up from $229.5 billion in 2009. This represents growth of 32.5 percent for the year. Percentage growth was higher in 2001 than in 2010, when revenue rose by 36.7 percent. However, revenue increased by $74.5 billion in 2010, a record increase that shattered the previous benchmark expansion of $59.2 billion in 2001. “While many observers expected the semiconductor industry in 2010 to achieve a solid rebound following the deep drop of 2009, the actual growth far outstripped all expectations,” said Dale Ford, senior vice president, market intelligence services for iSuppli. “The enormous expansion in semiconductor revenue was based on renewed demand for electronic equipment, such as computers, televisions and cell phones. However, semiconductor sales in 2010 are set to rise at more than three times the rate of electronics equipment revenue. This augmented growth is being driven by a range of multiplying factors, including inventory rebuilding, upward price pressure due to a supply/demand imbalance and an increase in the average semiconductor content of major electronic products.” Boom times for chips The semiconductor resurgence of 2010 is both broad and deep, as illustrated by results including: •Every major category within the semiconductor market, with the exception of NOR flash and specialty memory, is projected to achieve double-digit revenue growth in 2010. •Despite ongoing economic turbulence and uncertainty, the semiconductor industry achieved six sequential quarters of growth through the third quarter of 2010, marking the longest period of continuous growth since 2004. •The key DRAM and NAND flash memory market segments achieved 80 percent and 40 percent growth, respectively, leading the industry boom. •Out of 150 leading semiconductor suppliers tracked by iSuppli on a quarterly basis, an amazing 90 percent is expected to achieve revenue growth in 2010. Happy memories of 2010 The tremendous expansion in DRAM and NAND sales is benefiting the leading memory suppliers, causing many of them to exceed the expansion of the overall semiconductor market in 2010. Memory suppliers Hynix Semiconductor Inc. of South Korea and Elpida Memory Inc. of Japan are set to achieve revenue increases of 69.3 percent 74.2 percent, respectively-the largest growth among Top 20 semiconductor companies based entirely on organic growth. This will cause Elpida’s ranking to jump five spots, rising from No. 15 in 2009 to No. 10 in 2010. Hynix advanced one place to No. 6. Samsung Electronics Co. Ltd. of South Korea also is benefiting from the dramatic growth of the memory market. Company revenue is expected to surge by 60.8 percent, causing its market share expand to 9.3 percent, up 1.7 points from 7.6 percent in 2009. The urge to merge Growth among individual semiconductor suppliers in 2010 also was driven by mergers and acquisitions. Merger and acquisition activity in 2010 resulted in triple-digit growth for Renesas Electronics Corp. and Micron Technology Inc., allowing them to rise to No. 5 and No. 8 in the rankings, a jump of four and five positions, respectively. Renesas Electronics was formed by the merger of Renesas Technology Corp. and NEC Electronics Corp., which were ranked No. 9 and No. 12 in 2009 before their merger. Micron Technology completed its acquisition of Numonyx in 2010. Semiconductor surprises A deeper examination of the dramatic growth in the semiconductor market in 2010 yields some surprising insights. Despite the relatively modest growth of worldwide car sales in 2010, the automotive semiconductor market is projected to achieve the highest growth of all major chip application markets with growth of 41.1 percent. This will vastly exceed the growth of the second-fastest growing segment, the data processing semiconductor market, which expanded by 36.7 percent largely because of the red-hot DRAM segment. On the other hand, regardless of all the headlines showing the growth of smart phone shipments, the wireless communications segment will see the lowest overall growth among the major chip application markets, with semiconductor revenue rising by only 24.4 percent in 2010. Americas market rises again In another surprising outcome, chip sales to the Americas market are expected to see the highest growth of all worldwide regions in 2010 with an expansion of 38.4 percent. After years of leading the world in growth, the Asia-Pacific region in 2010 is projected to drop to second place in 2010, with 37.6 percent growth. On the other hand, companies headquartered in the Asia-Pacific region should capture in 2010 the No. 2 spot in overall combined market share. As a group, Asia-Pacific companies are expected to grow by 46.6 percent and move past the Japanese suppliers, who are projected to rise by 27.9 percent as a group, to become the second-largest regional faction of chip makers in the world following the Americas. Semiconductor winners and losers Marvell Technology Group Ltd. of the United States in 2010 is expected to achieve organic revenue growth of more than 43 percent and jump five places to the No. 18 spot. Qualcomm Inc. and Advanced Micro Devices Inc. (AMD) of the United States and Sony Corp. of Japan have experienced revenue growth notably less than the overall market and will slip three to four positions in the rankings in 2010. After a number of years of dramatically outperforming the market, MediaTek Inc. of Taiwan fell back to earth in 2010, as it will barely achieve revenue growth at 1.2 percent, the only company among the Top 20 to not achieve a double-digit increase. The company is expected to slip to No. 19 in the rankings, down from No. 16 place in 2009. With all of the market share moves among the Top 20 suppliers, only one company is at risk of dropping out of the list of 20. At this point, iSuppli projects nVidia Corp. of the United States will retain its ranking at No. 20. However, ROHM Semiconductor is competing for the final slot among the Top 20 and the final outcome should be very close. Soft landing in 2011 While growth in electronics revenue is expected to continue in 2011, the multiplying factors that propelled growth in 2010 will lose their potency next year. As a result, iSuppli is projecting a soft landing for the semiconductor industry in 2011 with 5 percent annual growth.

Currency Trading Margin – Forex Margin Trading As a Method of Leverage

Currency Trading Margin

A forex margin account is used by a forex trader when he wishes to invest into a position which requires a much higher financial investment than that which is currently available in the account of the trader. This is one of the unique advantages of the forex trade market wherein the traders are able to conduct transactions in currencies of worth which is much higher than the amount available in the forex account. Unlike the stock market and the equity market which offer little or no leverage to the trader, the forex market offers a leverage of 100:1 to its trader, implying that if a trader who has $1000 in his forex account decides to trade with a forex margin of 1% then he would be in a position to trade up to $100,000.

Forex margin trading is usually carried out through the broker and in order to indulge in this form of trade one needs to entail the services of a forex broker who offers margin trading as a part of a bigger package deal. This is owing to the fact that the concept of trading on forex margin is based on acquiring a short term loan from the broker for the purpose of indulging in trade and in return paying him a certain percentage of profits. Therefore, one first needs to open an account with the broker, deposit a certain amount of finances in it and then use forex margin trading to gain leverage and make a foray into the actual forex market. Currency Trading Margin

Although forex margin trading is considered to be an advantage of forex trading, a word of caution here would be pertaining to the proverbial two sides of the same coin. This implies that a forex trader might well be aware of the fact that if he can use the leverage option effectively, he stands to make phenomenal profits but at the same time if his investments turn out to be loss making then the extent of financial losses which would be incurred would also be manifold. This is evident from the fact that there are many people who complain of having lost out heavily due to forex trading and this is usually the case when people are misinformed about the market and make an educated use of the forex margin option. Currency Trading Margin