FX Margin/Leverage Calculation:
All Instruments are traded on Margin allowing you to Leverage your positions. The FX Standard Trading
Conditions display both Margin & Leverage Amounts; Margin is displayed as a Percentage (%) while Leverage is
displayed as a Ratio.
Percentage Margin Formula: Trade Size x Margin (%) = Margin Required in Primary Currency*
Leverage Margin Formula: Trade Size / Leverage = Margin Required in Primary Currency*
*Primary Currency is the First Currency quoted in an FX pair (CUR1 /CUR2: USD /JPY, EUR /USD, etc.)
Example 1
For a 1,000 EUR/USD Trade, with a Margin Requirement of 0.50% or Leverage of 200:1, the calculations are as
follows:
Percentage Margin Requirement: 1,000 x 0.005 = €5.00*
Leverage Margin Requirement: 1,000 / 200 = €5.00*
*The €5.00 is a Euro amount as Margin is calculated in the Primary Currency of the pair (EUR/USD: EUR =
Primary, USD = Secondary). If your account is denominated in a different currency the system will automatically
convert this to the Currency of your Account using the Current Market Rate.
Example 2
For a 1,000 USD/JPY Trade, with a Margin Requirement of 0.50% or Leverage of 200:1, the calculations are as
follows:
Percentage Margin Requirement: 1,000 x 0.005 = $5.00*
Leverage Margin Requirement: 1,000 / 200 = $5.00*
*The $5.00 is a US Dollar amount as Margin is calculated in the Primary Currency of the pair (USD /JPY: USD =
Primary, JPY = Secondary). If your account is denominated in a different currency the system will automatically
convert this to the Currency of your Account using the Current Market Rate.
Example 3
For a 1,000 GBP/CAD Trade, with a Margin Requirement of 0.25% or Leverage of 400:1, the calculations are as
follows:
Percentage Margin Requirement: 1,000 x 0.0025 = £2.50*
Leverage Margin Requirement: 1,000 / 400 = £2.50*
*The £2.50 is a Great British Pound amount as Margin is calculated in the Primary Currency of the pair (GBP
/CAD: GBP = Primary, CAD = Secondary). If your account is denominated in a different currency the system will
automatically convert this to the Currency of your Account using the Current Market Rate.
All Margin Requirements for FX Standard Instruments can be found on the AVATRADE Trading Conditions
page:
http://www.AvaTrade.com/Graphics/Images/fx.pdf