Margin Level in CFD Example

We shall first explain the various cfd margin levels used in cfd platforms and then explain what cfd margin level is using an example in MetaTrader 4 platform.

CFDs Margin, Margin Required, Equity, Used CFDs Margin & Free margin

What is Margin Required? : It is the amount of money your cfd broker requires from you to open a position. It is expressed in percents.

What is Equity? : It is the total amount of capital you've in your trading account.

What is Used CFD Margin? : amount of money in your trading account that has already been used up when buying a cfd lot, this contract is the one that is displayed in the open trades. As a trader you can not use this amount of money after opening a trade because you have already used it & it is not available to you.

In other words, because your cfd broker has opened up a position for you using capital you've borrowed, you must maintain this usable margin for your account as a security to allow you to continue using this cfd leverage he has given you.

What's Free CFD Margin? : amount in your account which you can use to open new trades. This is the amount of money in your account which hasn't yet been cfd leveraged because you have not yet opened a trade with this money - this money also is very important for you as a trader because it enables you to continue holding your open trades as will be explained below.

Example of What are the CFD Margin Levels in MetaTrader 4 Platform

The cfd margin examples on MetaTrader 4 cfd Platform below, the set cfd leverage is 100:1, the cfd margin which is 1% is $2683.07, therefore the total amount controlled by the trader is: $268,307 - this is because with this leverage the trader has used little of his money & borrowed the rest, with this set at 100:1, the trader is using 1 % of their account capital, this 1% is equal to $2683.07, if 1% is equivalent to $2683.07 then 100% is $268,307

How is CFD Trading Margin Level Calculated? - What is CFD Margin Level in CFD Trading?