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How do you calculate margin with floating leverage based on the total notional value of open positions?

Let’s take a look at how this works:

  1. 1 First we’ll open Position #1: Buy 30 lots of GBPUSD at 1.4584.
    • The notional value of this position is 4,375,200 USD (30 × 100,000 × 1.4584 = 4,375,200). Since the notional value is less than 5,000,000 USD, 1:1,000 leverage will be applied.
    • Required Margin: 4,375,200 / 1,000 = 4,375.20 USD
  2. 2

    Next we’ll open Position #2: Buy 25 lots of EURUSD at 1.3175.

    The notional value of this position is 3,293,750 USD (25 × 100,000 × 1.3175 = 3,293,750).

    Total Notional Value of Positions #1 and #2:

    • 4,375,200 (for Position #1) + 3,293,750 (for Position #2) = 7,668,950 USD
    • The total notional value of these positions is greater than 7,000,000 USD, but less than 12,000,000 USD. 1:1,000 leverage will be applied to the first 5,000,000 USD; 1:500 leverage to the next 2,000,000 USD; 1:200 leverage to the remainder.
    • Required Margin: 5,000,000 / 1,000 + 2,000,000 / 500 + 668,950 / 200 = 12,344.80 USD
  3. 3

    Next we’ll open Position #3: Buy 32 lots of GBPUSD at 1.4590.

    The notional value of this position is 4,668,800 USD (32 × 100,000 × 1.4590 = 4,668,800).

    Total Notional Value of Positions #1, #2 and #3:

    • 4,375,200 (for Position #1) + 3,293,750 (for Position #2) + 4,668,800 (for Position #3) = 12,337,750 USD
    • The total notional value of these positions is now greater than 12,000,000 USD, but less than 15,000,000 USD. 1:1,000 leverage will be applied to the first 5,000,000 USD; 1:500 leverage to the next 2,000,000 USD; 1:200 leverage to the next 5,000,000 USD; 1:100 to the remainder.
    • Required Margin: 5,000,000 / 1,000 + 2,000,000 / 500 + 5,000,000 / 200 + 337,750 / 100 = 37,377.50 USD
  4. 4

    Next we’ll open Position #4: Buy 36 lots of EURUSD at 1.3164.

    The notional value of this position is 4,739,040 USD (36 × 100,000 × 1.3164 = 4,739,040).

    Total Notional Value of Positions #1, #2, #3 and #4:

    • 4,375,200 (for Position #1) + 3,293,750 (for Position #2) + 4,668,800 (for Position #3) + 4,739,040 (for Position #4) = 17,076,790 USD
    • The total notional value of these positions is now greater than 15,000,000 USD. 1:1,000 leverage will be applied to the first 5,000,000 USD; 1:500 leverage to the next 2,000,000 USD; 1:200 leverage to the next 5,000,000 USD; 1:100 leverage to the next 3,000,000 USD; 1:25 leverage to the remainder.
    • Required Margin: 5,000,000 / 1,000 + 2,000,000 / 500 + 5,000,000 / 200 + 3,000,000 / 100 + 2,076,790 / 25 = 147,071.60 USD
  5. 5

    Next we’ll close Position #2: Buy 25 lots of EURUSD at 1.3175.

    The notional value of this position is 3,293,750 USD.

    Total Notional Value of the Remaining Positions (#1, #3, and #4):

    • 4,375,200 (for Position #1) +4,668,800 (for Position #3) + 4,739,040 (for Position #4) = 13,783,040 USD
    • After Position #2 is closed, the notional value of the remaining open positions drops to 13,783,040 USD. Since the notional value is now less than 15,000,000 USD, 1:25 leverage will no longer be applied. With the drop in notional value, the amount of margin required will be lower as well.
    • Required Margin: 5,000,000 / 1,000 + 2,000,000 / 500 + 5,000,000 / 200 + 1,783,040 / 100 = 51,830.40 USD

Attention:

The notional value ranges at which different levels of leverage are applied vary by instrument group (FX Majors, FX Minors, FX Exotics, FX RUB, Spot Metals). The notional value of open positions on your account is calculated separately for each group of trading instruments. Opening or closing a position on an instrument in one group will have no effect on the amount of leverage applied to positions in other instrument groups. You can learn more about the leverage offered for different instrument groups on our "Margin Requirements" page.

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