Back after a years absence, considering how to take a mid term 6-12 months investment in long WTICO, with minimal funds, whilst avoiding a margin closeout.
GBP acc say £1,000
10:1 (FCA max) margin required
At purchase WTI say $21,
GBP/USD say 1.23
Allowing for a dip to $11 and GBP/USD going to 1.13 at the same time (Murphy’s law)
I think the most I can buy is around 86 units
Margin at buy = 86 x $21 x 10% = $180 = £146.80
Margin at dip = £160
Drop in Acc at $11/£9.73 = £837
= £3 away from close out?
Shows why you need deep pockets to play in the black stuff. I could do this now only on the basis that oil is never going to be free! - Thinking about it I could almost eliminate risk of close out by assuming a $21 drop and buying 48 units!
I think a safer/better performing option would be to buying £1000 worth of oil index but open to suggestions (which I will not take as trading advice of course!)
i can see how this oil game is not for the faint hearted!
Before doing the above calc I created a £500 demo acc and bought 140 units around the $21 mark - much more than I would now, taking into account the above calculation
US Pres tweets about OPEC this afternoon and it jumps just has I happen to be watching it, bailed out and was plus £625 - BUT that could have just as easily been a £625 loss and wiped out the account in a matter of minutes.
Talking to myself in here but just an update on the original calc. I built a spreadsheet to take it all into account and with a bit more research discovered that according to this page (for UK apparently) OANDA help portal Oanda work on Margin Calls when your Equity represents 55% and 52.5% of your required margin and a Margin Closeout when that hits 50%. - I had assumed close out at Margin = Equity so more breathing room.
Oanda allows you to close out part of a position if things really go pear shaped but best not to be there in the first place!
Looks like this was the wrong place to ask 
Anyway for anyone else looking at this information I need to correct my original assumptions.
The margin requirement is constantly fluctuating - affected by both:
-
The exchange rate of the commodity. For example buying oil priced in USD from my GBP acc the margin is affected by the GBP/USD rate.
-
The value of the commodity. So if you are long that’s OK - as the commodity value goes up so does your margin req - but so does your NAV so no issues.
If it drops your NAV drops but so does the margin requirement - in both cases by a ratio of 1:10 (max European leverage).
BUT if you are short and the price moves up against you then your NAV goes down and your margin requirement goes up - so you either need a lot of account space or to watch it very carefully.
For a longer holding as this is intended to be the financing costs need to be taken into account as well. Details here Financing Costs | How Financing Costs are Calculated | OANDA
This is my understanding so far and I am yet to find this explained simply anywhere.
On the plus side, technical FOREX bored me to tears, this on the other had has been edge of the seat stuff for the last few days.