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Margin Calculation Examples Under Professional Trading Terms
Margin Calculation Examples Under Retail Trading Terms
Example 1: Buying a rolling spot FX product
Assuming your account type is Trade.MT4 and its deposit currency is USD, the leverage on major Forex instruments is provided as the per table below and calculated as follows:
| Margin Group | Leverage Rate |
|---|---|
| FX Majors | 1:30 |
Let`s open a position: Buy 1 lot EURUSD at 1.04440.
The notional position value in the account`s currency (USD) is 1 lot x 100,000 x 1.0444 = 104,440 USD.
The fixed leverage of 1:30 is applied to this position and the margin requirements are calculated as 104,440 / 30 = 3,481.33 USD.
Example 2: Buying a cash index CFD product
Example 2: Buying a cash index CFD product
Assuming your account type is Trade.MT4 and its deposit currency is USD, the leverage on cash index CFDs is provided as per table below and calculated as follows:
| Notional Position Value, USD | Leverage Rate |
|---|---|
| Major Indices | 1:20 |
Let`s open a position: Buy 10 lots on [GERMANY40] at 11,467.88 while the EURUSD rate in MetaTrader is 1.04440.
[GERMANY40] is quoted in EUR, so the notional position value in the account`s currency (USD) is 10 lots x 11,467.88 x 1.04440 = 119,770.54 USD.
Therefore, a leverage of 1:20 is applied to this position and the margin requirements are calculated as 119,770.54 / 20 = 5,988.53 USD.
Example 3: Selling a metal CFD product and increasing the open position on the same product
Example 3: Selling a metal CFD product
Assuming your account type is Trade.MT4 and its deposit currency is GBP, the leverage on metal CFDs is provided according to the table below as shown in the following two examples.
| Notional Position Value, GBP | Leverage Rate |
|---|---|
| GOLD | 1:20 |
Let`s open a position: Sell 2 lots GOLD at 1158.15 while the GBPUSD rate in MetaTrader is 1.22462.
GOLD is quoted in USD, so the notional position value in the account`s currency (GBP) is 2 lots x 100 oz x 1158.15 / 1.22462 = 189,144.37 GBP
Therefore, a leverage of 1:20 is applied to this position and the margin requirements are calculated as 189,144.37 / 20 = 9,457.22 GBP.
Example 3.2
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