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How do you calculate margin with floating leverage?

You probably don't have enough funds available to open the position. You can use this formula to calculate the amount you need to open a position (in the base currency):

Margin = Contract / Leverage

  • Margin: the amount you need to open a position

Base Currency: the first currency listed in the currency pair

  • In EURUSD, the base currency is EUR.
  • In USDJPY, the base currency is USD.
  • In GBPJPY, the base currency is GBP.
  • Contract: the size of the contract, in units of the base currency (1 lot = 100,000 units of the base currency, 0.1 lots = 10,000 units, etc.)

    Leverage: the leverage applied to the position

    • For 1:500 leverage, plug "500" into the formula.
    • For 1:100 leverage, plug "100" into the formula.
  • After calculating the margin in the base currency, you will need to convert this amount into the denomination of the account, using the exchange rate at the time the position is opened.

    The margin for stock index CFDs is calculated according to the following formula:

    CFD Margin = V (lots) ? Contract ? Market Price ? Margin Rate, %, where:

    Calculating the Margin for Currency Pairs:

    Here, we'll calculate the margin required to open the following position:

    • Trading Instrument: EURUSD
    • Base Currency: EUR
    • Contract Size (in lots): 0.1 lots
    • Contract Size (in base currency): 10,000 EUR (100,000 ? 0.1 lots)
    • Leverage: 1:100 (use 100 in formula)
    • Rate When Position Opened: EURUSD - 1.3540
    • Trading Account Denomination: USD

    Now we'll do the math:

    1. 10,000 EUR / 100 = 100 EUR (Margin = Contract / Leverage)
    2. After calculating the margin in the base currency, we need to convert this amount into USD, the currency in which the account is denominated: Margin = 100 EUR ? 1.3540 = 135.40 USD.
    3. 135.40 USD is needed to open this position.

    Calculating the Margin for Spot Metals:

    Now, we'll calculate the margin needed to open the following position:

    • Trading Instrument: XAUUSD
    • Contract Size (in lots): 0.1 lots
    • Contract Size (in troy oz): 10 troy oz (100 troy oz ? 0.1 lots)
    • Margin: 1:100 (use 100 in formula)
    • Rate When Position Opened: XAUUSD - 1,381.50
    • Trading Account Denomination: USD

    1. Margin = (Contract ? Ðrice) / Leverage = (10 ? 1381.50) / 100 = 138.15 USD
    2. 138.15 USD is needed to open this position.

    Calculating the margin for stock index CFDs:

    Here, we'll calculate the margin required to open the following position:

    Now here's the maths:

    1. CFD Margin = V (lots) ? Contract ? Market Price ? Margin Rate, % = 0.1 lots ? 100 ? 2292.6 ? 1.5% = 343.89 USD.
    2. 343.89 USD is needed to open this position.

    • Our "Trader's Calculator" makes calculating margin requirements easier. Simply enter the details of the position you would like to open and press "Calculate".
    • When calculating the required margin, keep in mind that most of our accounts feature floating leverage.

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    Risk disclaimer: Before trading, you should ensure that you fully understand the risks involved in leveraged trading and have the required experience.

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