Margin & Leverage

Margin is equity from your account set aside by FOREX.com to maintain a position when you’re trading on leverage.

Leverage is the ability to control a large position with a small amount of capital. It is usually denoted by a ratio. For example, if your account has a leverage of 20:1, that means you can trade a position of $50,000 with only $2500.

Please note that increased leverage increases risk.

Our margin requirements differ according to platform (FOREX.com or MetaTrader), market, asset class and position size. You can find out the specific margin of each instrument in its Market Information Sheet on the FOREX.com desktop platform or view our list of margin requirements by product.

To calculate the amount of funds required to cover the margin requirement when you open a trade, simply multiply the total notional value of your trade (quantity x price of instrument) by the margin factor.

For example, say the margin requirement for EURUSD is 5%. The current buy price of EURUSD is 1.300 and you wish to buy 1 standard lot (100,000).

The total value of the position is $130,000 (100,000 x 1.300). $6500 would therefore be allocated from your account to open the position ($130,000 x 5%).

With FOREX.com platforms, you can calculate the required margin before placing a trade through the platform’s margin calculator, monitor each position’s margin requirement separately or review your account’s total margin requirement through the Margin Indicator.

Keep in mind that when you have open positions, your margin requirement for those positions will adjust to the current market pricing.

The larger the trade size, the higher the risk level associated with the trade. Therefore, we may increase our margin requirements for larger size trades or any additional trades in that instrument. To do this, FOREX.com increases the size of the margin requirement at specific quantity levels, known as step margin levels. You can view a market’s step margin levels in its Market Information Sheet within the FOREX.com desktop platform.

Step margins are not present in MetaTrader 4.

While our margin requirements, closeout levels and real-time margin system are designed to limit your trading losses, you do risk incurring losses greater than your account balance, especially during periods of extreme market volatility. For this reason, we strongly encourage you to manage your use of leverage carefully.

Some markets on the FOREX.com desktop platform may benefit from orders-aware margining, which means that placing a stop loss order on an open position will reduce the margin required to maintain that position. Information on whether a market includes orders-aware margining can be found within the Market Information Sheet within the FOREX.com desktop platform.

The margin requirement for hedged markets is determined by the largest side (leg). This means that to the extent you carry open long position(s) and short position(s) in the same product, your combined margin will be determined as the applicable margin percentage multiplied by the position representing the largest open position.

For example, you are trading CFDs and have two open Wall Street positions, originally selling a quantity of 10 and then buying a quantity of 5. In this case, you would only the margin for the original, larger side of the trade will be applied: the Wall Street short 10 position. Assuming that the margin for selling 10 Wall Street is £1,691.45 and the margin for buying 5 Wall Street is £845.7, you would only need to provide enough margin to cover the original, larger sell position for both of the trades in this market.