This is the amount we reserve to execute the trade and provide leverage. When trading on margin, you should know that your margin requirements will change depending on the leverage and the size of your positions.
Margin is often expressed as a percentage of the total position. So, trading, for example, on EUR/USD might only require a deposit of 2% of the total position value to open. Therefore, instead of depositing €100,000, you would only need to deposit €200.
Please note that the margin changes automatically when the leverage changes, for example:
If you trade the Euro at a price of 1.1425 with a contract size of 1 Lot and leverage of 1:500, then the required margin for the Euro contract will be approximately $228. Therefore, you need to deposit $230 into your account to be able to trade a standard 100,000 contact with a size of 1 Lot.
However, if your contract sizes exceed 20 Lots, the leverage will change to 1:300, and therefore the required margin will become for example, $380 per 1 Lot.
The margin calculation process is as follows:
Margin = contract size/leverage * price
Regardless of your account type or available balance, your leverage will be determined based on your active trading volume at any given time. Whenever your trading volume exceeds one limit, the trading platform will automatically adjust your leverage according to the table below:
