In MetaTrader's trading conditions, Margin requirements are expressed as a percentage of a transaction's nominal value that will be set aside as the margin.
Information about each instrument's trading conditions is available in the Instrument Specification. For example, for EUR/USD, the margin requirement is 0.1%.
This is the percentage of the transaction's nominal value that will be held in the account as margin.
Let's look at a calculation example for this instrument.
Let's assume that we're planning to open a position on EUR/USD at 1.18250 with a volume of 1 lot.
One lot corresponds to 100,000 units of the base currency.
That means that the transaction's nominal value is:
1.18250 (opening price) * 100,000 (transaction volume) = $118,250
Only 0.1% of this amount, i.e., $118.25, will be reserved as margin.
How can I determine the maximum leverage for each instrument?
If necessary, the margin requirement expressed as a percentage can be interpreted in a form that many traders find familiar.
To do so, divide the margin requirement expressed as a percentage by 100.
In our example, the leverage for EUR/USD is 100/0.1 = 1000. As a fraction, the leverage is 1/1000.
Several formulas for calculating the margin for different types of trading instruments are shown below:
For directly priced pairs like EUR/USD and GBP/USD:
Margin = Current Price * Volume/Leverage
For reverse priced pairs like USD/RUB and USD/JPY:
Margin = Volume/Leverage
For cross rates like EUR/RUB and EUR/JPY:
Margin = Current Price * Volume/Leverage/Price of the currency being quoted
Calculating margin for stocks and indices:
Margin requirements in % * volume of shares * instrument volume = margin for an open position