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# How do I calculate the minimum amount required to open a position (margin)?

**The margin for currency pairs is calculated in the base currency as follows:**

Margin = V (lots) × Contract / Leverage, where:

**Margin**— deposit required to open the position.**V (lots)**— volume of the position you want to open in lots.**Contract**— the size of the contract, expressed in units of the base currency. One lot always amounts to 100,000 units of the base currency. Accordingly; 0.1 lots = 0.1× 100,000 = 10,000 units of the base currency, while 0.01 lots = 0.01 × 100,000 = 1,000 units of the base currency.**Leverage**— the ratio of personal funds to borrowed funds applied to the position:- For leverage of 1:1000, plug “1000” into the formula;
- For leverage of 1:500, plug “500” into the formula.

**Base currency** — the first currency appearing in a currency pair quotation, for example:

- EURUSD — EUR is the base currency;
- USDJPY — USD is the base currency;
- GBPJPY — GBP is the base currency.

After calculating the margin in the base currency, you will need to convert this amount into the denomination currency of your account (using the exchange rate at the time the position is opened) – either USD or EUR.

**Example 1.** Calculating the margin for currency pairs.

Here’s what we need:

**Trading instrument**(currency pair) — EURUSD.**Base currency**— EUR.**Volume (V, lots)**— 0.1.**Contract**— 100,000 EUR.**Leverage**— 1:100.**EURUSD rate at the time of opening the position**— 1.35400.**Account’s denomination currency**— USD.

- Margin = V (lots) × Contract / Leverage = 0.1 × 100,000 EUR / 100 = 100 EUR.
- Now we convert this into the denomination currency (USD). When making a conversion, if your denomination currency is the base currency in the pair, you need to divide your margin by the exchange rate, whereas if it’s the quote currency, you’ll have to multiply by the exchange rate: Margin = 100 EUR × 1.3540 = 135.40 USD.
- 135.40 USD is needed to open this position.

**Example 2.** Calculating the margin on a cross currency pair.

Here’s what we need:

**Trading instrument**(currency pair) — AUDCAD.**Base currency**— AUD.**Volume (V, lots)**— 0.1.**Contract**— 100,000 AUD.**Leverage**— 1:100.**AUDCAD rate at the time of opening the position**— 0.99484.**AUDUSD rate at the time of opening the position**— 0.78373.**Account’s denomination currency**— USD.

- Margin = V (lots) × Contract / Leverage = 0.1 × 100,000 AUD / 100 = 100 AUD.
- Now we convert this into the denomination currency (USD). In this case, we need to use the AUDUSD exchange rate at the time the position was opened: Margin = 100 AUD × 0.78373 = 78.373 USD.
- 78.373 USD is needed to open this position.

**The margin for spot metals is calculated as follows:**

Margin for spot metals = V (lots) × Contract × Market Price / Leverage, where:

**Margin**— deposit required to open the position.**V (lots)**— volume in lots.**Contract**— size of one lot.**Leverage**— the ratio of personal funds to borrowed funds applied to the position.

**Example.** Calculating the margin for spot metals.

Here’s what we need:

**Trading instrument**(spot metal) — XAUUSD.**Volume (V, lots)**— 0.1.**Contract**— 100 Troy oz.**Leverage**— 1:500.**XAUUSD rate at the time the position is opened**(market price) — 1,332.442.**Account’s denomination currency**— USD.

- Margin = V (lots) × Contract × Market Price / Leverage = 0.1 × 100 × 1,332.442 / 500 = 26.648 USD.
- 26.648 USD is needed to open this position.

**The margin for commodity and index CFDs is calculated as follows:**

CFD Margin = V (lots) × Contract × Market Price / Leverage, where:

**CFD Margin**— deposit required to open the position.**V (lots)**— volume in lots.**Contract**— size of one lot (volume of the trading instrument in the position).**Leverage**— the ratio of personal funds to borrowed funds applied to the position.

**Example.** Calculating the margin for commodity and index CFDs.

Here’s what we need:

**Trading instrument**(index) — SPX500.**Volume (V, lots)**— 0.1.**Contract**— 100 USD.**Leverage**— 1:50.**SPX500 rate at the time the position is opened**(market price) — 2,804.5.**Account’s denomination currency**— USD.

- Margin = V (lots) × Contract × Market Price / Leverage = 0.1 × 100 × 2,804.5 / 50 = 560.90 USD.
- 560.90 USD is needed to open this position.

**Attention:**

- Our "Trader's Calculator" makes calculating margin requirements easier. Simply enter the details of the position you would like to open and press "Calculate".
- When calculating the required margin, keep in mind that most of our accounts feature floating leverage.

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