Good afternoon sir..
Regarding how to calculate margin and fund resistance. If we trade GBP/JPY (example GBP/JPY price = 132.71), following the formula that mas explained,
if we place 1 lot, our free margin will be in the negative, right sir..?
Margin = (100000 X 1 X 132.71) X 1:500
But when I trade GBP/JPY at 0.03 lot with a $200 balance, it's allowed sir.. I use FBS broker.
Please explain it to me.. because I'm a newbie, thank you in advance..
Best regards..
To Budi Santoso,
The calculation of margin depends on leverage and the contract size of the traded pair. For example, the margin calculation for GBP/JPY with a size of 0.03 lots using leverage 1:500.
^ For cross pairs, the running price used for margin calculation is the running price of the base currency. In this case, for the GBP/JPY pair, the base currency is GBP/USD.
Therefore, the margin required to open a GBP/JPY position of 0.03 lots with a leverage setting of 1:500 is only USD 7.33.
Hopefully this can help.
@ Budi Santoso:
To calculate the margin for the GBP/JPY cross pair, the GBP/USD price at that time must be known.
Formula: Margin = (USD 100,000) x (number of lots or volume) x (margin percentage) x the GBP/USD price at that time.
For example: if the GBP/USD price at that time = 1.2500, then Margin = USD 100,000 x 0.03 x 0.2% x 1.2500 = USD 7.50.