Your MT5 account is on a tiered margin system that is used to set the margin rates at levels that reflect the size of your position in a particular market.
This means that there will be different margin requirements at different levels of exposure. Smaller positions generally benefit from better market liquidity, so these positions attract our lowest margin rates.
Our tiers start at one, with the lowest margin rates, and go up to four, with the highest margin rates.
For example, EURUSD's margin rates are as follows:
- Tier 1 (0 to 100 lots): 0.20% / 1:500 Leverage
- Tier 2 (100 to 200 lots): 0.50% / 1:200 Leverage
- Tier 3 (200 to 300 lots): 1.0% / 1:100 Leverage
- Tier 4 (300 lots and above): 3.0% / 1:33 Leverage
Calculation: Open price * contract size * volume in lots * margin rate as a decimal = margin required
Margin calculation on FX pairs
EURUSD Example 1:
A client buys 120 lots of EURUSD at a price of 1.0100. The total exposure falls under 2 tiers
(tier 1 and tier 2), so for the first 100 lots, which fall under tier 1, the margin rate is 0.2%.
Margin = 1.0100 (open price) * 100,000 (contract size) * 100 (volume in lots) * 0.2% (margin
rate) = USD 20,200.
For the remaining 20 lots, the margin rate is 0.5% since they fall under tier 2.
Margin = 1.0100 (open price) * 100,000 (contract size) * 20 (volume in lots) * 0.5% (margin
rate) = USD 10,100.
The TOTAL margin required for this position is USD 30,300.
The same client in ‘Example 1.a’ buys another 10 lots of EURUSD at a price of 1.0200.
The total position is now 130 lots, which means that the additional 10 lots fall into margin
tier 2 at a 0.5% margin rate.
Margin of the 10 lots position = 1.0200 (open price) * 100,000 (contract size) * 10 (volume
in lots) * 0.5% (margin rate) = USD 5,100.
The TOTAL margin required becomes USD 30,300 + USD 5,100 = USD 35,400