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Behind Your Trading Day

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

Sergei (CPO at UTEX.io) avatar
Written by Sergei (CPO at UTEX.io)
Updated over 2 months ago

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

The ratio, which determines the maximum amount that the platform offers you for trading. UTEX—Margin’s leverage is 30×, it cannot be changed.

Overnight threshold (for stock trading)

The sum of balance and net realized profit multiplied by 4. If your positions 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 trading.

Position

Buying a stock or a coin means opening a trading position. As long as the stock (or coin) remains in your account, the position is open. To close it, you need to sell the stock (or coin).

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. However, you can reduce the set limit. How to do this is described in the article about risk management.

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 balances and positions in the trading terminal.

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

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