Calculating the required margin for an order helps ensure you have sufficient funds in your trading account to open and maintain it.
For margin calculations with leverage:
Margin = lots x contract size / leverage size
Let’s take 2 lots of EURUSD, with a leverage of 1:2000.
- Lots: 2
- Contract size: EUR 100 000
- Leverage size: 2 000
Margin = 2 x 100000 / 2000 = EUR 100
For margin calculations with fixed margin requirement:
Margin = lots x contract size x required margin
Let’s take 0.5 lots of AUDUSD.
- Lots: 0.5
- Contract size: AUD 100 000
- Required margin: 0.20%.
Margin = 0.5 x 100000 x 0.002 = AUD 100
Margin requirements for fully hedged orders equal 0%.