What is Maintenance?
Definition of Maintenance: It refers to the low margin or the ration of leverage that sets a stage that account the balances which should satisfy while the leverage or margin is currently in use. This is regarded as the precautionary measure used for mitigating the risk of forex trader and broker. If the account balance comes below this particular level, the forex trader will attain a margin call looking for more money on the deposit or the instructions for liquidating the securities to give back the account to such a status that can be accepted. The maintenance need is the lowest quantity to be collateralized for keeping an open place. Generally, it is lower compared to the need of the starting margin. This permits the cost to move against a margin without even forcing the call immediately following the initial transaction. The positions that are determined to be risky, on the other hand, the exchange, the broker or the regulators may locate the requirement of the maintenance which is much higher compared to the normal one. The level of maintenance is less than the liquidation level of the broker. At that specific point, the trader will unwind the positions in an automatic manner to mitigate the danger of default.