How the margin is calculated?

To calculate this parameter, we recommend you to use Forex calculator.

The formula used for calculating the margin in the base currency of the trading instrument:

<Margin> = <Contract size> / <Leverage>

The base currency of the trading instrument is the first currency in the instrument ticker, for example:

  • EURUSD – the base currency is EUR.
  • USDCHF – the base currency is USD.
  • GBPUSD – the base currency is GBP.

Contract size is the volume of the order in the base currency of the trading instrument.

1 lot is always equal to 100,000 units of the base currency. Therefore:

  • 0.1 lots = 100,000 * 0.1 = 10,000 units of the base currency.
  • 0.01 lots = 100,000 * 0.01 = 1,000 units of the base currency.

Leverage is the leverage value, for example:

  • Leverage 1:50 - 50.
  • Leverage 1:100 - 100.

After calculating the margin in the instrument base currency, it has to be converted into the account currency (USD, EUR, RUB, or GOLD) at the exchange rate that exists at the moment the position is opened.

Example:

The trader, who has leverage 1:100, buys 1 lot of EURUSD. The margin for this position is calculated in the following way:

The base currency for the EURUSD long position is EUR. The margin for this position equals to 100,000 / 100 = 1,000 EUR.

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