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Behind Your Trading Day

How leverage works and why it is important to keep track of your balance

Written by Sergei (CPO at UTEX.io)

Definitions

Balance

The amount of real funds in your account. The maximum amount for trading with leverage and loss limit are calculated on the basis of this balance. At the end of the trading day, net realized profit (after fees deduction) is added to the balance.

Leverage

A ratio that determines the maximum amount the platform provides you for trading. On UTEX—Margin, the leverage is up to ×100 for the Stocks and Goods+ markets, and up to ×30 for cryptocurrencies. It cannot be adjusted.

Position

Buying an instrument (such as a stock, cryptocurrency, or commodity) opens a trading position. The position remains open as long as the instrument is held in your account. To close the position, you need to sell the instrument. More about positions.

Profit

Unrealized (current) profit occurs when the value of an open position changes during the trading day. Its value constantly changes. If you close a position, the unrealized profit from it becomes realized profit. Commissions on trades are deducted from the realized profit. Total profit is the sum of unrealized and net realized profit (after fees deduction).

Loss limit

This is the maximum amount of total daily loss. If it is exceeded, your positions will be automatically closed at the market price and further trading will be blocked until the next day. By default the limit is 80% for the stock market and 70% for the cryptocurrency market, and 60% for the commodities market. However, you can reduce the set limit. For more information, see our article on risk management.

Overnight threshold (for stock trading)

The sum of balance and net realized profit multiplied by 4. If your position amount exceeds the overnight threshold at market close, the risk manager can reduce positions at the market price. There is no such restriction for cryptocurrency and commodities trading.

Behind your trading day

Let's look at an example of how trading works in UTEX–Margin. To do this, we’ll pay closer attention to the section with balance and profit in the trading terminal.

A trading report is also generated at the end of the day.

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