Margin calculation explained
Margin calculation is the process of determining the amount of capital required to open and maintain a trading position. It is usually calculated as a percentage of the total trade value. For example, if the initial margin requirement is 10% for a contract worth $10,000, the margin required to open the position would be $1,000. The maintenance margin is the minimum balance needed to keep the position open. If the account value drops below this threshold, a margin call is triggered. Leverage allows traders to control larger positions with less capital, amplifying both potential profits and losses.
Trading CFDs involves a high degree of risk. Leveraged positions can magnify both gains and losses, and in some cases, losses may exceed your original investment. These products aren't suitable for everyone. Please consider your financial situation and experience before trading. We recommend reviewing your financial goals and understanding the mechanics and risks of CFD trading before proceeding. Past outcomes do not guarantee future performance. The information presented on this website is designed for general informational purposes only and should not be interpreted as personalized financial advice.
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