The margin requirement is the amount of funds used to hold a position open.
Example Calculation:
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Account Currency: KES
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Currency Pair: USDCAD
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Base Currency: USD
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Volume: 1.00 lot (100,000 units of base currency)
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Leverage: 1:400
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Margin Calculation: (100,000 * 1) / 400 = 250.00 USD
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KES Conversion using USD/KES rate on Market Watch: 250 * 129.600 = KES 32,400
Formula for Required Margin Calculation:
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For Indices:
Margin Requirement = Leverage × Value of the Index (Price) × Volume Traded (Lots) -
For Stocks:
Required Margin = Volume × Standard Lot Size × Market Price × Margin%