How margin contracts work
If we take an example, one lot (100,000 EUR) of EUR/USD pair with a unit price of 1.10 USD will cost you 110,000 USD . However, a 1% margin will enable you to open a position worth 110,000 USD by paying only 1,100 USD . A leverage of 100:1 will also give you the same level of market exposure as trading on 1% margin.
How margin contracts work
If we take an example, one lot (100,000 EUR) of EUR/USD pair with a unit price of 1.10 USD will cost you 110,000 USD . However, a 1% margin will enable you to open a position worth 110,000 USD by paying only 1,100 USD . A leverage of 100:1 will also give you the same level of market exposure as trading on 1% margin.
How to calculate margin for products on Deriv
When trading on Deriv, you can calculate the margin allowed for a contract by using one of the formulas below:
- The leverage formula: This formula calculates margin as Volume in lots x lot size x asset price / leverage = margin. The leverage formula is used in determining the margin for forex currency pairs and commodity pairs.
- The margin rate formula: This formula calculates margin as Volume in lots x lot size x asset price x margin rate = margin. The margin rate formula is used in determining the margin for cryptocurrency contracts.