Margin is the amount of funds required to open and maintain a position.
You can calculate it before you trade, or check it directly from the order window in MT4/MT5.
Prerequisites
To estimate the margin requirement, you may need:
- Contract size
- Lot size
- Open price
- Margin percentage
- Applicable leverage
You can find these details in MT4/MT5 by right-clicking the instrument in Market Watch and selecting Specification.
Margin Calculation Methods
Different instruments may use different margin calculation methods.
Forex
Margin = Contract Size × Lot Size × Margin Percentage ÷ Leverage
CFD
Margin = Contract Size × Open Price × Lot Size × Margin Percentage
CFD with Leverage
Margin = Contract Size × Open Price × Lot Size × Margin Percentage ÷ Leverage
The calculation method shown in the instrument's Specification determines which formula applies.
Example: Forex
For 1 lot of EUR/USD with:
- Contract size: 100,000
- Lot size: 1
- Margin percentage: 100%
- Leverage: 1:200
The calculation is:
100,000 × 1 × 100% ÷ 200 = 500 USD
The actual margin requirement may differ if the applicable leverage, margin percentage, exchange rate, or other trading conditions change.
Why the Margin Requirement Can Change
The margin required for a position may change due to:
- Changes in the instrument's price
- Changes to applicable leverage or margin requirements
- The position is denominated in a currency different from your account currency
- Temporary or dynamic leverage conditions apply
For example, if a position's margin is calculated using its market price, changes in the price can change the margin requirement.
Important Points
- Different instruments can have different margin requirements. Do not assume that the same formula or leverage applies to every product.
- Hedged positions may require less. On a hedged account, an offsetting position may attract reduced or zero margin for the hedged portion.
- Margin is not a cost. When a position is closed, the margin associated with that position will be released, subject to any resulting profit or loss and other account conditions.
