This ratio is calculated using the following formula:
Margin = Volume * Contract size / Leverage
You may also find the minimum margin in the Contract Specifications section of the instrument.
Let's familiarize ourselves with some common terms that would be encountered while calculating margin requirements.
Volume:
The volume is taken in lots where:
1.00 refers to 1 standard lot or 100,000 units of the base currency.
0.10 refers to 10,000 units of the base currency.
0.01 refers to 1,000 units of the base currency.
Contract size — Equivalent to the traded amount on the Forex or CFD market, which is calculated as a standard lot size multiplied by the lot amount. The Forex standard lot size represents 100,000 units of the base currency. For CFDs and other instruments see details in the Contract Specifications page.
Leverage — The ratio of the position`s notional value to the amount of margin required for opening a position (e.g., leverage 1:20 means that a EUR 100,000 contract requires as low as 5,000 EUR margin).
However, when the client wants to open multiple trading instruments then margin requirement calculation can be done as follows:
Margin requirement = Total Notional Value / Leverage
Total notional value: Volume * Contract Size
Leverage levels vary depending on the notional value of the instruments being traded.
For detailed information, please refer to the Margin Requirements page on our website. If you'd like to see practical examples, we also recommend reviewing the Margin Calculations page for more clarity.
If the account currency differs from the currency of the instrument, then we need to convert the currency. If the margin currency is in the first place in the currency pair and the account currency is on the second, then we need to multiply the margin by the exchange rate. If the margin currency is in second place in the currency pair, then we need to divide the margin by the exchange rate. For example, if we have established that the margin is 100 EUR and the account currency is USD, we multiply 100 EUR by 1.05484. On the contrary, if the margin is 100 USD, then we would calculate as 100 USD / 1.05484
*Please note that the currency rate is used as an example only, you should check the currency rate in your Meta Trader platform
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