Our Group Markets.com Trading Markets.com Investment
About Products Platforms Learn
  EN
العربيةEnglishEspañol
Support Login
About Products Platforms Learn

Got any questions? Our team are always on hand to help.

    Support

Got any questions? Our team are always on hand to help.

    Support

Got any questions? Our team are always on hand to help.

    Support

Got any questions? Our team are always on hand to help.

    Support

Got any questions? Our team are always on hand to help.

    Support
Login
Home Global reach with a truly individual service Costs and Pricing Margin
Costs and Pricing

Margin

Margin is a key concept to grasp in trading: it is the money you need to lay down in order to open a leveraged trade. Margin and leverage are related terms. In short the leverage ratio determines the amount of margin you need to have in your account.

Margin rates vary across different regions and asset classes. Leverage allows you to gain full exposure to a market by investing only a fraction of the capital you would normally require. Upon opening a transaction, the margin value will be required and held as collateral to be maintained until termination of the relevant transaction. The amount of the margin payments is dependent on the leverage ratio of the CFD, the underlying financial instrument and the contract value of the transaction.

Example

If you are trading FX with a leverage ratio of 30:1 – equivalent to a margin rate of 3.33% – it means you can control a trade with a notional value of £3000 with only £100 of margin.

The minimum level required for maintaining positions is 50%. For example, in the above scenario, once opening the trade you would need to maintain at least £50 of available funds in your account to satisfy the margin requirements. If you fail to satisfy this threshold, we will close all your opening positions beginning with those that are least profitable.

How to calculate margin

CFD EURUSD Example:

EUR/USD has an underlying market price of 1.10842, with a sell price of 1.10840, and a buy price of 1.10844. You short the pair – decide to sell EUR – with a trade size of 2 CFDs at 1.10840. The contract is equivalent to one lot of 100,000 of the base currency, which in this pair is the euro. So here selling one contract is the same as trading €100,000 for $110,842, therefore your total position size selling 2 forex CFDs is worth $221,684 (€200,000). 

The leverage on major currency pairs such as EURUSD is 30:1 (20:1 on minor pairs). So with this CFD you only need 3.33% of the notional value of the trade, so your margin would be 3.33% of the total exposure of the trade, which is $7,382 (€6,660).

Leverage and Margin

At times, leverage is expressed in percentage terms and referred to as the margin requirement. For example, a leverage of 1:30 is a margin requirement of 3.33%.

Initial/Used Margin

The initial margin is a percentage of the full value of a position that you must have as collateral to open the CFD (or spread betting) position.

Required Margin

The required margin refers to the amount you are expected to have at the time of opening a position. This amount includes the cost that will occur due to the spread in addition to the used margin.

Free Margin

The free margin refers to the sum of funds you have available to use as initial margin for new positions. This is calculated by subtracting the margin used for your current positions from your equity.

Margin Call

A margin call occurs if trades move against you and your available funds may not cover margin requirements.

Maintenance Margin

Maintenance margin refers to the minimum equity you need to have in order to keep your positions open. If your equity falls below the minimum equity, the Margin Close out level will be met, and your open positions will start liquidating without receiving notice from us. Default margin close out is set at 50%.

Check out our range of exceptional trading tools

View Trading Tools

Got a Question? Try Our Knowledge Centre

Check out the most popular pages of our Knowledge Centre below.

FAQs

FAQs

We answer your frequently asked questions.

View
News

News

Our take on how the latest news is impacting the markets

View
Analysis

Analysis

Read our opinions and more in-depth analysis of key issues.

View
XRay

XRay

Check out our live video sessions discussing the key market news.

View
Markets.com
Regulation and Legal Pack Privacy Policy Cookie Disclosure Staying Protected Online

Payment Methods

Follow us on

facebook instagram twitter youtube

Listed on

Finance magnates directory listed
Forex live listed

MARKETS.COM A GLOBAL BRAND

The domain global.markets.com is solely and exclusively operated by TradeTech Markets (BVI) Limited (“TTMBVI”) which is an authorized and regulated by the B.V.I Financial Services Commission (“FSC”) under the Securities and Investment Business Act, 2010, licence number SIBA/L/14/1067. TTMBVI is located at Ritter House, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.

CFD and Investment Strategy Builder accounts are provided by Tradetech Markets (BVI) Limited. Share Dealing accounts are offered in selected jurisdictions by Safecap Investments Limited (a company registered in Cyprus and regulated by CySEC under license number 092/08).

Risk Warning: Trading Foreign Exchange (Forex) and Contracts For Difference (CFD) is highly speculative, carries a high level of risk and is not appropriate for every investor. Any advice provided on this website is general advice only, and has been prepared without taking your individual objectives, financial situation or needs into account. Before deciding to trade Forex/CFDs offered by Markets.com, you should carefully consider your objectives, financial situation, needs and level of experience, and consider seeking independent professional advice. By trading, you may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. Please read the full Risk Disclosure Statement and Terms and Conditions.

TTMBVI Is owned by TradeTech Markets Limited and is a subsidiary of Playtech PLC, a company traded on the London Stock Exchange’s Main Market and a constituent of the FTSE 250 index.

For privacy and data protection related complaints please contact us at privacy@markets.com. Please read our PRIVACY POLICY STATEMENT for more information on handling of personal data.

For Media Contact:
Headland Consultancy
T: +44 (0)20 3805 4822
E: playtech@headlandconsultancy.com

CySEC (EU)

Products

  • CFD
  • Share Dealing
  • Strategy Builder
  • Client’s funds are kept in segregated bank accounts
  • FSCS Investor Compensation up to EUR20,000
  • Negative Balance Protection

Markets.com, operated by Safecap Investments Limited (“Safecap”) Regulated by CySEC under licence no. 092/08 and FSCA under licence no. 43906.

Visit

FSC (GLOBAL)

Products

  • CFD
  • Strategy Builder
  • Clients’ funds kept in segregated bank accounts
  • Electronic Verification
  • Negative Balance Protection

Markets.com, operated by TradeTech Markets (BVI) Limited (“TTMBVI”) Regulated by the BVI Financial Services Commission (‘FSC’) under licence no. SIBA/L/14/1067.

Active

FCA (UK)

Products

  • CFD
  • Spread Bets
  • Strategy Builder
  • Client’s funds are kept in segregated bank accounts
  • FSCS Investor Compensation up to GBP85,000
    *depending on criteria and eligibility
  • Negative Balance Protection

Markets.com operated by Finalto Trading Ltd. Regulated by the Financial Conduct Authority (“FCA”) under licence number 607305.

Visit

ASIC (AU)

Products

  • CFD
  • Clients’ funds kept in segregated bank accounts
  • Electronic Verification
  • Negative Balance Protection

Markets.com, operated by Finalto (Australia) Pty Ltd Holds Australian Financial Services Licence no. 424008 and is regulated in the provision of financial services by the Australian Securities and Investments Commission (“ASIC”).

Visit

FSCA (ZA)

Products

  • CFD
  • Strategy Builder
  • Clients’ funds kept in segregated bank accounts
  • Negative Balance Protection

Markets.com, operated by TradeTech Markets (South Africa) (Pty) Limited (“TTMSA”) Regulated by Financial Sector Conduct Authority (‘FSCA’) under the licence no. 46860.

Visit

Selecting one of these regulators will display the corresponding information across the entire website. For more information click here.

Marketsi
An individual approach to investing.

Whether you’re investing for the long-term, medium-term or even short-term, Marketsi puts you in control. You can take a traditional approach or be creative with our innovative Investment Strategy Builder tool, our industry-leading platform and personalised, VIP service will help you make the most of the global markets without the need for intermediaries.

Share Dealing Investment Strategy Builder

Share Dealing in the Markets Group is only offered by Safecap Investments Limited regulated by CySEC under license number 092/08. We are now re-directing you to Safecap’s website.

Redirect
Cookies

We use cookies to do things like offer live chat support and show you content we think you’ll be interested in. If you’re happy with the use of cookies by Markets.com, click accept.

Accept Cookies
Manage Cookies
Strictly Necessary
Functionality Cookies

Functionality Cookies enable a website to remember information that changes the way the website behaves or looks, like your preferred language or the region that you are in.

Tracking Cookies

Tracking cookies are used to track visitors across websites. The intention is to display ads that are relevant and engaging for the individual user and thereby more valuable for publishers and third party advertisers.

If you would like to find out more about our use of cookies, please visit our cookie disclosure and privacy policy.

Save Settings