Spread, Leverage and Margin
The spread is ask minus bid. A new position starts with an unrealised spread cost when valued at its closing side. Wider spreads increase the distance needed to break even.
Learning outcomes
✓ Explain spread cost
✓ Explain leverage and required margin
✓ Explain margin call and stop-out
Course curriculum
1. Spread cost · 12 min
The spread is ask minus bid. A new position starts with an unrealised spread cost when valued at its closing side. Wider spreads increase the distance needed to break even.
2. Leverage and required margin · 12 min
Required margin equals base units converted to the account currency divided by leverage. Higher leverage reduces the margin deposit but does not reduce the economic exposure or loss per pip.
3. Margin call and stop-out · 12 min
Margin level equals equity divided by used margin, expressed as a percentage. TradePath can flag a margin call and simulate closing positions at a configured stop-out level.