Margin


Margin
Perhaps, the most intriguing aspect of the Forex market is the almost universal use of "margin" in trades. Purchasing stocks and bonds on any significant margin has been illegal in the United States since the Great Depression. Forex market-makers, however, do make trades for their clients with one percent or less of the trade price on deposit with the deal-maker.
You can open an account at some of the on-line market-makers with a deposit as small as twenty-five USD ($25.00). This is significant in that a minimum trade is approximately one hundred USD. If you make a one hundred USD trade with only twenty-five USD on deposit, you are making a trade on seventy-five percent margin.
In the field of precious metals trading and investing, this is called leveraging. Often described as "controlling a multiple of your investment." However, in the field of precious metals trading, leveraged purchases generally include a "covering" loan from a financial institution which is secured by the deposit of the precious metals in a secure facility as collateral.