Dumb question that I should know the answer to.
Is margin requirement a single % across any pair or does that change based on the pair I’m trading?
And does that also change like the spread changes at different times of the day?
Or maybe it changes based on the units/lots I’m trading at that time?
I’m trying to manually calculate my margin requirement on a EURJPY trade.
Using Oanda.
Any thoughts?
Oanda’s margin rules. Not sure why they have to dump this stuff in a pdf instead of just showing it on the website.
What is margin?
OANDA takes a form of security (or deposit) against any losses that you may incur when you trade
using leverage, this collateral is typically referred to as margin. Although there is no minimum
deposit needed to open an fxTrade account with OANDA, the funds available in your account will
limit the size of the position(s) that you can open.
The margin needed to open each trade is derived from the leverage limit associated with the asset
class that you wish to trade. For example, if you were trading with leverage set at 30:1, you would
be asked to deposit margin of 3.3% of the full value of the trade that you wished to enter into (1
over 30 is 0.03 or 3.3%). In other words, when trading with leverage of 30:1, you can open a €30
trade for each euro of available funds to cover margin on your account.
Cool table with margin rates (they change based on your leverage setting)
Margin rates
We are regulated by the NFA and they set our margin and leverage rates
No, margin requirements will change base on the pairs you are trading.
Let’s say you buy EUR/JPY. You are buying Euros, so you have to fork out an amount, base on your leverage/margin allowed. Let’s say you are buying 1 lot of EURJPY, that would be 100,000 Euros. Suppose the broker allows you to put up a mere 5%, you need to put up 5,000 Euros.
However, if you intend to buy AUD/JPY, you are buying 100,000 aussie dollars. Suppose the broker allows you to put up a mere 5%, you need to put up 5,000 Aussie dollars.
Now, let’s say your account is in USD. To get the 5,000 Euros or 5,000 Aussie dollars, do you need the same amount of USD? The answer is no.
Ah makes sense, thanks.
