“Margin Requirements 

 > Explanatory Article by Marios Kyriakou, MSc Economics


About the author: Marios Kyriakou has a bachelor’s degree in Economics from the University of Cyprus and a master’s degree in Economics from the University of Warwick. He is also a holder of CySEC’s Advanced Certificate in Financial Services Legal Framework and a professional in Online Trading, Forex and CFDs with more than 7 years of experience.

  Watch our Videos on YouTube


> Should you find this article and video useful share so you can help your friends too. Click the like button and the subscribe button to our YouTube channel  so in the future, you can be notified when we upload more useful free educational videos to watch.

<Last updated 25.04.2020>

Dear reader,

Hi! If you are interested in online trading you should read the below that provides important explanation of what is margin required and the difference from leverage.

 

What is Margin Required?

You can buy 100,000 EUR with a deposit of  just 1000 EUR (margin required). When you decide to close a position, the deposit that you originally made is returned to you and a calculation of your profits or losses is done.

Leverage will determine the margin required, the deposit, also known as “margin “. Is the account denomination currency important? Yes.

Example: The account leverage is 1:100. This means that when trading 100,000 EUR, if your account is in EUR you need only 1000 EUR as margin > Leverage allows you to buy 100,000 with just 1000 Eur. So the margin required to open a 100,000 position is 1000. As a percentage, the margin requirements will be 1000/100,000 = 0.01 or 1%.

When trading CFDs you have to be careful of margin requirements. when trading specific asset classes leverage is not taken into account. However, only Margin Requirement setting will be taken into account. You can access this information when reading the contract specifications.


 

“I hope I am clear on this one. If not, contact us on social media and we will do our best to help you.

Thank you for reading my articles and watching my videos.”

Marios Kyriakou

Disclaimer: This article is intended for educational purposes only and does not replace independent professional judgement. Its purpose is to act as a complementary educational service to society, promoting personal development and social, economic and cultural progress of citizens. While this content has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by the creator to the accuracy or completeness of the information presented or any other written or oral information made available to any interested party and any such liability is expressly disclaimed.
Risk Warning: Trading in Forex and Contracts for Difference (CFDs), which are leveraged products involves substantial risk of loss as there is considerable exposure to risk in any off-exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of the markets that you are trading. You should carefully consider your investment objectives, level of experience and risk appetite before making a decision to trade with us. Most importantly, do not invest money you cannot afford to lose. It is possible to lose all the initial capital invested.

© HCPro Human Capital Professional Education 2018-2020 | All Rights Reserved. HCPro Human Capital Professional Education is a tradename of COME WITH ME EDUCATION LTD - Company Registration No. HE 390680.

Log in with your credentials

Forgot your details?