What's the Formula Used to Calculate Margin?

The following cfd terms are used in the formula of how to calculate cfd margin.

CFD Margin, Margin Required, Equity, Used CFDs Margin and Free CFDs 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 cfd trading account.

What is Used CFDs Margin? : amount of money in your cfd 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 cannot use this amount of money after opening a cfd trade because you have already used it to open another trade and 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 cfd 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 transaction with this money - this is also very important for you as a trader because it enables you to continue holding your open cfds trades as will be explained below.

Example of Formula for How to Calculate CFDs Margin 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

What's the Formula Used to Calculate CFDs Trading Margin?