LEVERAGE & MARGINS
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Understanding the basics: What is Initial / Required Margin?
The Initial Margin, also called the Initial Margin Requirement, is the percentage of a financial instrument’s price you pay with your own money. It’s the collateral needed to start a margin position. The Required Margin, or Margin Requirement, is what you need to open and maintain a position, plus the initial loss from the spread.
The Required Margin is derived from the following formula: (Amount * Instrument Price)/ Leverage + (Amount * Spread).
Example: Trading 3 lots of EUR/USD using 1:200 leverage with an account denominated in USD, trade size: 300,000 and account currency exchange rate: 1.13798 would have a required margin of USD 1706.97 calculated by 300,000 / 200 * 1.13798 = $1706.97.
Leverage and Margin
Explore margin requirements on the Financial Instrument pages at Vestrado, where you can
choose a leverage ratio from 1:10 to 1:2000.
| Base on Notional Value | Leverage on Frux Standard Account | Leverage on Fides Cashback Account | Leverage on ECN Respectus Account | Leverage on Economic News |
|---|---|---|---|---|
| 0 – 100000 | 1 : 2000 | 1 : 1000 | 1 : 1000 | 1 : 1000 |
| 100000 – 300000 | 1 : 1000 | 1 : 1000 | 1 : 1000 | 1 : 500 |
| 300000 – 1000000 | 1 : 500 | 1 : 500 | 1 : 500 | 1 : 300 |
| 1000000 – 2000000 | 1 : 200 | 1 : 200 | 1 : 200 | 1 : 100 |
| 2000000 – 3000000 | 1 : 100 | 1 : 100 | 1 : 100 | 1 : 100 |
| 3000000 – 5000000 | 1 : 50 | 1 : 50 | 1 : 50 | 1 : 50 |
| 5000000 and above | 1 : 5 | 1 : 10 | 1 : 5 | 1 : 10 |
* Vestrado reserves to apply changes to and amend the leverage ratio. Please read our Terms and conditions ( here ).
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Frequently Asked Questions (FAQ’s)
Leverage allows traders to control larger positions with a smaller amount of capital. It magnifies both gains and losses.
Margin is the amount of money required to open a leveraged position. It acts as a security deposit to cover potential losses.
If your account balance falls below the required margin, you may receive a margin call or your positions may be automatically closed to prevent further losses.