Margin refers to the amount of capital a trader must deposit with their broker to open a leveraged position. Margin requirements ensure that traders have enough funds in their accounts to cover potential losses. Understanding how to calculate margin requirements is crucial for managing risk and ensuring that you meet your broker's margin obligations.
How to Calculate Margin
The margin requirement depends on the leverage ratio and the size of the trade. Margin is typically expressed as a percentage of the trade size (position value) and is calculated using the following formula:
Margin Requirement = Trade Size/Leverage Ratio​
For example, if y...