How do I calculate the margin required for a trade?
The required margin is the amount required from your account to open a position. It depends on the product’s calculation method, your lot size, applicable leverage and account currency.
What information do I need?
Before calculating margin, check:
- Contract size: The quantity represented by one lot.
- Lot size: The volume you intend to trade.
- Applicable price or exchange rate: The value needed for the product’s calculation method.
- Applicable leverage: The leverage used for that product and position.
- Account currency: Whether the calculated margin needs currency conversion.
You can find product details by right-clicking the product in Market Watch in MetaTrader 4 (MT4) or MetaTrader 5 (MT5) and selecting Specification. Your account leverage is available in the PU Prime Client Portal, but the leverage applied to a particular product may be lower.
How do I calculate margin requirement?
Trading Product | Margin Calculation Formula |
|---|---|
Forex | Contract Size × Lot Size × Margin Percentage ÷ Leverage |
CFD | Contract Size × Open Price × Lot Size × Margin Percentage |
CFD with Leverage | Contract Size × Open Price × Lot Size × Margin Percentage ÷ Leverage |
Convert the result into your account currency if necessary.
How does lower leverage affect required margin?
Lower leverage increases the margin required for the same position.
Example: How much margin is required to trade 1 lot of XAUUSD?
The example required margin is USD 350 when opening 1 lot of XAUUSD (Gold) under the following conditions:
| Item | Value |
| Gold Price | USD 3,500 |
| Contract Size | 100 |
| Lot Size | 1 lot |
| Margin Percentage | 100% |
| Leverage | 1:1000 |
To calculate the required margin, use the following formula:
- Margin = Contract Size × Open Price × Lot Size × Margin Percentage ÷ Leverage
Substituting the values:
- Margin = 3,500 × 100 × 1 × 100% ÷ 1,000 = USD 350
You would therefore need USD 350 in available margin to open this position.
When is currency conversion required?
Conversion is required when the calculated margin currency differs from your account currency.
- Forex: Margin is generally calculated in the pair’s base currency before conversion.
- Other products: The margin currency depends on the product’s specifications.
- Conversion rate: Changes in the applicable exchange rate may affect the margin expressed in your account currency.
Do not assume that every product’s margin is calculated in its quoted currency.
What conditions can change the calculation?
- Product-specific requirements: Some products use fixed margin rates or different calculation methods.
- Leverage limits: A product’s leverage may be lower than your displayed account leverage.
- Dynamic leverage: Temporary limits may increase the margin required for new positions.
- Tiered requirements: Different portions of a position may use different leverage levels, where applicable.
- Hedged positions: Margin requirement depends on the product’s hedged-margin settings. Opposite positions do not always reduce margin to zero.
What should I check before placing the trade?
- Confirm the product’s calculation method and applicable leverage.
- Use your intended lot size and the relevant price or conversion rate.
- Review any temporary or product-specific margin conditions.
- Ensure your free margin is sufficient to meet the requirement.
- Review any pre-trade margin estimate available in your platform, while allowing for changes before execution.
Margin is not a trading fee. When a position closes, its margin requirement is removed. Your remaining funds still reflect any trading profit and loss and applicable charges.
