Mon, October 03, 2022

CFD Margin Calculator

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CFD (Contract for Difference) Margin is the amount of money that a trader needs to enter a CFDs trade. CFDs are complex instruments and the chance of losing your money is very high. In other words CFD margin is the minimum deposit that a trader needs to make in order to access brokers’ funds. That is why CFD Margin Calculator is an essential tool that every trader needs to have.
How to use the Calculator
  1. Enter the contract size, or number of shares you are trading for;
  2. Fill in the market price per share that is present for the market;
  3. Choose the leverage provided to you by your broker;
  4. Please, enter the margin rate, margin rates, as well as leverage, are also provided by the broker;
  5. Hit the  “Calculate” button to get the required CFD margin.
After hitting calculate you will get an amount of leverage or the amount of money that is needed to enter the trade.
The CFD Margin Formula
Since leveraged products are complex and one may easily lose money when trading, the trader must not only acknowledge the risks involved, but also understand how the CFDs margin calculation formula looks and works.
(( Contract Size * Market Price) / User Leverage) * Required Margin Rate = CFD margin

Where:

Contract Size – the number of shares that one is willing to trade;

Market Price – the present price per share on the market;

User leverage – the leverage provided by broker to the trader;

Required Margin Rate – the percentage margin requirements needed to open a trading position.

Please keep in mind that CFDs are extremely complex instruments. Along with experience and market expertise, one must be aware of basic calculations needed not to lose money. We hope that our CFD Calculator will be really helpful for you as a trader.

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