What is required margin?Required Margin
The funds set aside to open and hold a position = position value ÷ leverage (or position value × margin requirement).
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- CFDsCFD Leverage Doesn't Change Your Position
Leverage = position value ÷ required margin. For the same position, leverage only changes how much money you put up, not the P&L from price moves.
- CFDsRequired Margin and Position Size
Required margin = position value ÷ leverage. The bigger the position, the more margin is locked up, and the more you lose on the same move.
- CFDsThree Cases: Leverage, Position Size and Risk
With the same $1,000 of margin, losses can differ by 2x; at the same leverage, a position 5 times bigger means losses 5 times bigger.
Related terms
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