Calculating the margin per order is crucial to understand how much funds you need in your account to open a specific trade. Here's a step-by-step guide on how to calculate the margin for different types of instruments.
1. Determine the Margin Calculation Mode
To know which formula to use for margin calculation, you need to determine the margin calculation mode of the trading instrument. This can be found in the MT4/5 terminal:
Right-click on the trading instrument.
Choose Specifications.
Find the required field indicating the margin calculation mode.
2. Understand the Margin Formulas
The formulas for calculating margin vary depending on the type of instrument:
Forex: Margin Currency = Base Currency.
Margin = lots * contract size / leverage * percentage / 100.
CFD: Margin Currency = Quote Currency.
Margin = lots * contract size * market price * percentage / 100.
CFD-Index: Margin Currency as per Contract Specification.
Margin = lots * contract size * market price / tick size * tick value * percentage / 100.
3. Perform the Calculation
After determining the appropriate formula, calculate the margin in the base currency and then convert it to the account currency.
Examples
Forex Example:
Instrument: EURCHF.c.
Account: Standard_Cent.
Volume: 15.00 lot.
Leverage: 1:1000.
EURUSD Price: 1.18402.
Margin = 15 * 1,000 / 1,000 * 100 / 100 = 15 EUR.
Converted Margin = 15 * 1.18402 = 17.7603 USD = 1,776.03 US cents.
CFD Example:
Instrument: AAPL.
Account: Pro.
Account Currency: KWD.
Volume: 1.00 lot.
AAPL Price: 451.40 USD.
KWDUSD Price: 3.26925.
Margin = 1 * 1 * 451.40 * 5 / 100 = 22.57 USD
Converted Margin = 22.57 / 3.26925 = 6.90 KWD
CFD-Index Example:
Instrument: EU50.s.
Account: Pro.
Account Currency: USD.
Volume: 0.30 lot.
EU50 Price: 3,350.20 EUR.
EURUSD Price: 1.18402.
Margin = 0.3 * 1 * 3,350.20 / 0.1 * 0.1 * 0.5 / 100 = 5.022 EUR.
Converted Margin = 5.022 * 1.18402 = 5.94 USD.
Notes: The prices in these examples are for illustration purposes only. For accurate calculations, always use the current live prices from your MT terminal.
If the margin is insufficient, consider decreasing the lot size, increasing leverage, or making a deposit to increase your account balance.