Understanding how margin is calculated is essential for managing your exposure and planning your trades. Depending on the instrument you're trading, Forex or CFDs, Bullwaves applies different margin calculation methods to determine the required funds to open or maintain a position.
Margin Calculation Methods
There are four main calculation modes depending on the asset type:
Forex
For currency pairs, margin is calculated as:
Margin = Contract Size × Lot × Margin % ÷ Leverage
This is the most common formula and applies to major and minor Forex instruments. For example, trading 1 lot (100,000 units) of EUR/USD at 1:100 leverage would require a specific portion of your capital, adjusted by the margin percentage.
CFDs with Leverage Mode
Used for leveraged CFDs (like some commodities or indices):
Margin = Contract Size × Lot × Open Price × Margin % ÷ Leverage
This calculation accounts for both the asset’s price and the selected leverage.
Standard CFD
For CFDs that don’t apply leverage the same way, the formula is:
Margin = Contract Size × Open Price × Lot × Margin %
This is common for cash indices or specific equity CFDs.
CFD Initial Margin
For some instruments, the margin is based on an initial fixed requirement:
Margin = Initial Margin × Lots × Margin %
This method is used when the platform defines a fixed margin per lot, independent of leverage.
Before placing any trade, make sure to check the margin requirements directly in the trading platform or on the Trading Conditions page to avoid unwanted stop-outs or margin calls.