Margin
Margin - The aggregate amount of customer cash pledged against the aggregate Open Position(s). The margin pledged is a function of Maximum Trading Leverage Ratio. The higher the leverage, the lower the pledged Margin. The lower the leverage, the higher the Margin needed to carry the position.
Mathematically, Margin = Open Position Amount / Maximum Trading Leverage Ratio. For example, a USD/CHF 100,000 USD position at Maximum Trading Leverage Ratio 50:1 will require pledged Margin equal to 100,000/50 or $2,000.
Note: To calculate margins for currency pairs, where USD is NOT the Base (First) Currency (e.g. EUR/USD, GBP/USD…) and crosses (EUR/JPY, GBP/JPY…), the Counter Currency amount is first converted into USD using the average exchange rate(s).
Example: Customer buys 1 lot of EUR/USD when the price is .9600-9604. The average exchange rate is .9602. Therefore, 100,000 EUR equals 96,020 USD. $96,020 / 50 Leverage Ratio = $1,920.40
|
