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.
Calculation: Open price * contract size * volume in lots * margin rate as a decimal = margin required
USOILRoll, where margin rates are as follows:
- Tier 1 (0 to 1 lot): 0.5% / 1:200 Leverage
- Tier 2 (1 to 5 lots): 1.0% / 1:100 Leverage
- Tier 3 (5 to 10 lots): 2.0% / 1:50 Leverage
- Tier 4 (10 lots and above): 3.0% / 1:33 Leverage
Margin calculation on commodities
A client buys 5 lots of USOILRoll at a price of 95.50
The first 1 lot the margin rate is 0.5% (1:200) = margin = 95.50 (Open price) * 1,000 (lot size) * 1(volume in lots) * 0.5% (margin rate) = USD 477.50
Remaining 4 lots the margin rate is 1.0% (1:100) = margin = 95.50 (Open price) * 1,000 (lot size) * 4(volume in lots) * 1.0% (margin rate) = USD 3,820
TOTAL margin required for this position is USD 4,297.5
The same client in ‘Example 1’ buys another 3 lots of USOILRoll at a price of USD 96.00.
The total position is now 8 lots which falls into margin tier 3 at a 2.0% margin rate.
The required margin of the 3 additional lots is calculated as = 96.00 (open price) * 1,000
(contract size) * 3 (volume in lots) * 2.0% (margin rate) = USD 5,760.
The TOTAL margin required then becomes USD 4,297.50 + USD 5,760 = USD 10,057.50.