Margin Trading

Question 1

If a trade can purchase lots they can use:

Answer 1

leverage

Question 2

When a trader uses leverage, they wouldnt need to pay the vast lot upfront. Instead they put down a small “deposit” known as:

Answer 2

Margin

Question 3

Describe Leverage:

Answer 3

the ratio of the transaction size to the actual cash used for margin

Question 4

What can a transaction side also be referred to as?

Answer 4

Position size

Question 5

What is a synonymous term for cash in trading?

Answer 5

Trading Capital

Question 6

Describe Margin Trading:

Answer 6

Allows traders to conduct relatively large transactions with a small amount of initial capital

Question 7

A small margin deposit can lead to large losses or gains.
True or False

Answer 7

True