I am having real difficulty understanding the size of a position value. i would really appreciate some help here from you more experienced guys. I have taken the following example from Oanda's website just by way of example. The rate they use in the example is out of date but the position value and margin required of the trade
does make sense.
OANDA FXTrade - Margin Rules
"You have set your maximum leverage to 50:1. Your Account is in USD and the current EUR/USD rate is 0.9134/36
The Position Value of 10,000 EUR/USD long is 10,000 EUR converted to USD, which is equal to 10,000 x 0.9136, or $9,136. The margin requirement for EUR/USD is 2% (when the account maximum leverage is set to 50:1).
As a result, the margin required on this EUR/USD position is equal to $9,136 x 0.02, or $182.72."
But I am trying to work out the example of a GBP/YEN trade, using the above criteria, and the figures i am getting are incredible. Am i doing something wrong (I would be trading in GBP, not USD):
10,000 x 228.875 [current GBP/YEN rate] or £2,288,750. Therefore margin requirement is £2,288,750 x 0.02 or £45,775. Is this correct? I have calculated it using the exact same criteria and i get a staggering figure for both position size and margin requirements.
Thanks all.