Trading Conditions | Conditions

Margin Requirements

In Every Margin Lies an Opportunity to Realise Your Goals

Margin is the amount of funds required in order to trade. This amount is dependent on position size, the market price of the currency pair, and the leverage of your account.

For example, if your account balance is $20,000, your leverage is set to 1:1 and you want to initiate a position of 0.1 standard lots (or 10,000 units of currency) at EUR/USD at a market price of 1.20, then the minimum margin requirement would be $12,000.

In the above example, the minimum margin requirement is calculated by converting 10,000 Euros into 12,000 US Dollars. Using the same example, but with a leverage setting of 1:100, the minimum margin requirement would be $120.

The formula to calculate the minimum margin requirement is:
Minimum Margin Required = (Position Size multiplied by the Current Price) divided by Leverage.

Example:


Position Size = 1 standard lot of EUR/USD (100,000 units)
EUR/USD = 1.20000
Leverage = 50:1
Minimum Margin Required:
100,000*1.20000/50 = 2,400 USD

Margin Call
A margin call is an alert generated by your trading platform when your account value (Equity) is equal to or less than a certain percentage of the minimum margin requirement.

Please note that NBH Markets does not provide a margin call warning. Margin calls are triggered when your account equity has dipped below a certain percentage of required margin to support your open positions. This occurs when your floating losses reduce your account equity to a level that is less than your margin requirement. We advise all clients and traders to strictly adhere to margin requirements when trading. Minimum margin requirements on open positions must be maintained by the customer at all times. Any or all open positions are subject to liquidation by NBH Markets should a minimum margin requirement fail to be maintained. Margin requirements may change at any time. NBH Markets will do its best to inform the client about any projected changes by email and via the trading platform’s message system at least a week, before changes come into effect.

Our platforms issue a margin call at 100% level. This means a margin call will be triggered when the account value (Equity) is equal to 100% of required margin to support all the open positions. If a margin call is set at 100%, it means that the account equity should be equal to the margin used. This is simply a warning message that the trader needs to deposit more funds.

Example:


Position Size: 1 lot (100,000 units)
EUR/USD = 1.20
Leverage = 50:1
Margin Required = 2,400
Equity = 3,000 (no margin call)
Equity = 2,400 (MARGIN CALL)

Stop Out Level

Stop out is the level at which our trading platform automatically closes one or more open positions to safeguard the client and our company’s interests. This will occur if your account value is equal to or less than a certain percentage of the Minimum Margin Requirement.

If the stop out is set at 50%, then when the account equity reaches 50% of the margin used, all positions will be automatically closed, starting with the account with the most losses, until either there are enough funds to maintain the remaining positions or there are no open positions left.

Example


Position Size: 1 lot (100,000 units)
EUR/USD = 1.20
Leverage = 50:1
Margin Required = 2,400
Equity = 3,000 (no stop out)
Equity = 2,400 (margin call)
Equity = 1,200 (STOP OUT)

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