Margin Level in CFD Example

We shall first explain the various cfd margin levels used in cfd platforms and then explain what cfd margin level is using an example on MT4 software.

CFDs Margin, Margin Required, Equity, Used CFD Margin & Free margin

What's Margin Required? : It is amount of money your cfd broker requires from you to open a position. It is expressed in percents.

What's Equity? : It is total amount of capital you have in your trading account.

What is Used CFDs Margin? : amount of money in your trading account which has already been used up when buying a cfd lot, this contract is one that's displayed in open trades. As a trader you can not use this amount of money after opening a trade order transaction because you've already used it & it is not available to you.

In other words, because your cfd broker has opened up a position for you using the capital you've borrowed, you must maintain this usable margin for your trading account as a security to allow you to continue using this cfd leverage he has given you.

What's Free CFDs Margin? : amount in your account that you can use to open new trade positions. This is amount of money in your account that has not yet been cfd leveraged because you have not yet opened a trade with this money - this money also is very important for you as a trader because it enables you to continue holding your open trades as will be explained below.

Example of What are the CFD Margin Levels on MT4

The cfd margin examples in MetaTrader 4 cfd Platform below, the set cfds leverage is 100:1, the cfd margin which is 1% is $2683.07, therefore the total amount controlled by cfd trader is: $268,307 - this is because with this leverage the trader has used little of his money and borrowed the rest, with this set at 100:1, trader is using 1 % of their capital, this 1% is equivalent to $2683.07, if 1% is equal to $2683.07 then 100% is $268,307

How is CFD Margin Level Calculated?