Your MT5 account is on a tiered margin system that is used to set the margin rates at levels that reflect the size of your position in a particular market.
This means that there will be different margin requirements at different levels of exposure. Smaller positions generally benefit from better market liquidity, so these positions attract our lowest margin rates.
Our tiers start at one, with the lowest margin rates, and go up to four, with the highest margin rates.
For example, EURUSD's margin rates are as follows:
- Tier 1 (0 to 100 lots): 0.25% / 1:400 Leverage
- Tier 2 (100 to 200 lots): 0.50% / 1:200 Leverage
- Tier 3 (200 to 300 lots): 1.0% / 1:100 Leverage
- Tier 4 (300 lots and above): 3.0% / 1:33 Leverage
Calculation: Open price * contract size * volume in lots * margin rate as a decimal = margin required
Margin calculation on FX pairs
EURUSD Example 1:
A client buys 120 lots of EURUSD at a price of 1.0100
First 100 lots the margin rate is 0.25% (1:400) = margin = 1.0100 (Open price) * 100,000 (contract size) * 100 (volume in lots) * 0.25% (margin rate) = USD 25,250
Remaining 20 lots the margin rate is 0.5% = margin = 1.0100 (Open price) * 100,000 (contract size) * 20 (volume in lots) * 0.5% (margin rate) = USD 10,100
The TOTAL margin required for this position is USD 35,350
EURUSD Example 2:
The same client in ‘Example1’ now buys another 10 contracts of EURUSD at a price of 1.0200
The total position is now 130 lots which is in margin tier 2 which has a 0.5% (1:200) margin rate.
Additional margin = 1.0200 (Open price) * 100,000 (contract size) * 10 (volume in lots) * 0.5% (margin rate) = USD 5,100
The TOTAL margin required for this position is USD 35,350 + USD 5,100 = USD 40,450