Margin

Margin

Definition 
The amount of capital required to open and maintain a forex trade, determined by the leverage used and the size of the position.

Formula
Margin = (Trade Size in Lots * Contract Value) / Leverage

  • Trade Size in Lots: The number of standard lots (or mini, micro, etc.) traded.
  • Contract Value: The standard value per lot in the traded currency pair (e.g., 100,000 units for standard lots in major pairs).
  • Leverage: The ratio of borrowed funds to your own capital (e.g., 100:1 leverage).

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