Leverage & Margin | Master Financial Instruments

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The Use Of
Leverage & Margin

One of the main appealing factors about forex trading is the use of Leverage & Margin. It allows you to use a small amount of capital to open and maintain a much larger position. For example, if you want to open a trade of $100,000 worth of EURUSD, you don’t have to have that $ 100,000 dollar in your account!

Leverage & Margin

What is Leverage?

Leverage is a concept that enables you to multiply your exposure to a financial instrument, without committing the whole capital necessary to own the physical instrument. When trading using Leverage you only need a fraction of the total value of your position, the rest is effectively lent to you. Profits and losses are based on the total size of the position, so the end result of a trade can be much larger than the initial outlay, in terms of profits or losses. CFDs are a form of leverage trading. The amount needed to open and maintain a leveraged trade is called “the margin”. Trading using leverage is sometimes called “margin trading”. In general, the term leverage is used when a small change in the price of the CFD is amplified into a bigger change so that the CFD offers an “accelerated” return/loss. Leverage of “10%” (or 1:10) means that if the price of the underlying asset changes by 1%, it is as if the price of the CFD changed by 10%. For example, a $100 balance leveraged by 1:10 increases to $1000. This allows you to buy up to $1000 worth of instruments. Information about the predefined leverage set per instrument can be found by clicking on the 'Details' link next to the instrument’s name on the platform’s main screen.

At CWG Markets, you can use leverage to trade flexibly. The leverage ratio of different account types can be from 1:1 to 1000:1. To minimize your trading risk, margin and leverage will be adjusted dynamically based on the net value of your account and the data releasing period.

Equity	Forex Leverage	XAUUSD	XAGUSD	Spot Energy	Indices
$10≤ Equity ＜$2000	1:1000	1:400	1:100	1:100	Hk50 - 1:33，others 1:100
$2000≤ Equity ＜$30000	1:500	1:400	1:100	1:100	Hk50 - 1:33，others 1:100
$30000≤ Equity ＜$50000	1:200	1:400	1:100	1:100	Hk50 - 1:33，others 1:100
$50000≤ Equity ＜$100000	1:100	1:400	1:100	1:100	Hk50 - 1:33，others 1:100
$100000≤ Equity	1:100	1:200	1:100	1:100	Hk50 - 1:33，others 1:100

The leverage forex will be decreased to 1:500 if there is announcement of high impact financial news, or before holidays or in the weekend. The other trading instruments will not be affected.

Financial News: High impact financial news (United Kingdom, United States, Europe and Japan) 30 minutes before until 30 minutes after the breaking news announcement, the Forex leverage will be adjust to 1:500
Weekend: Platform time (Summer Time GMT+3, Winter Time GMT+2) from 22:00 on Friday (2 hours before the closing of the Forex market) to 02:00 (two hours after the opening of Forex market) on next Monday, the Forex leverage will be adjusted to 1:500
Holidays: The leverage may adjusted based on the risk during holidays, and you will be notified earlier. You can check in the MT platform and click mailbox to view it.

Notes: All the current holding position and new positions leverage will be decreased during the adjustment of leverage.

Equity	Forex Leverage	XAUUSD	XAGUSD	Spot Energy	Future	Indices
$0≤ Equity ＜$35000	1:400	1:400	1:100	1:100	COPPER 1:100	Hk50 - 1:33，others 1:100
$35000≤ Equity ＜$50000	1:200	1:400	1:100	1:100	NGAS 1:20	Hk50 - 1:33，others 1:100
$50000≤ Equity ＜$100000	1:100	1:400	1:100	1:100	USOIL、UKOIL 1:50	Hk50 - 1:33，others 1:100
$100000≤ Equity	1:100	1:200	1:100	1:100	USOIL、UKOIL 1:50	Hk50 - 1:33，others 1:100

Equity	Forex Leverage	XAUUSD	XAGUSD	XPTUSD	Spot Energy	Future	Indices	Indices Future
$0≤ Equity ＜$35000	1:400	1:400	1:100	1:20	1:100	COPPER 1:100	Hk50 - 1:33，others 1:100	1:100
$35000≤ Equity ＜$50000	1:200	1:400	1:100	1:20	1:100	NGAS 1:20	Hk50 - 1:33，others 1:100	1:100
$50000≤ Equity ＜$100000	1:100	1:400	1:100	1:20	1:100	USOIL、UKOIL 1:50	Hk50 - 1:33，others 1:100	1:100
$100000≤ Equity	1:100	1:200	1:100	1:20	1:100	XCOTTON、COFFEE 1:33	Hk50 - 1:33，others 1:100	1:100

Equity	Forex Leverage	Precious Metals	Spot Energy	Future	Indices	Indices Future
Equity ≥$30000	1:100	XAUUSD、XAGUSD 1:100	1:100	COPPER 1:100	Hk50 - 1:33，others 1:100	1:100
Equity ≥$30000	1:100	XAUUSD、XAGUSD 1:100	1:100	NGAS 1:20	Hk50 - 1:33，others 1:100	1:100
Equity ≥$30000	1:100	XAUUSD、XAGUSD 1:100	1:100	USOIL、UKOIL 1:50	Hk50 - 1:33，others 1:100	1:100
Equity ≥$30000	1:100	XPTUSD 1:20	1:100	COTTOMN、COFFEE 1:33	Hk50 - 1:33，others 1:100	1:100

Leverage & Margin

What is
Margin?

It may be easier to understand if you think of the margin as a deposit for the trade that you want to open and maintain. The broker that you’re trading with will keep a portion of your balance to cover the potential loss of that trade. Once you close the position, the margin will be credited back into your account.

The margin is normally expressed as a percentage of the whole trade and is called the ‘Margin requirement’. You’ll be given a margin requirement for every trade that you open, and it will vary depending on the instrument that you trade and the broker that you choose to trade with.

Leverage & Margin

What are the
Margin Requirements?

One of the major benefits of trading CFDs is that clients can trade on margin using leverage. CFD trading means clients can trade a portfolio of shares, indices, or commodities without having to tie up large amounts of capital. In order to open and maintain a position, initial and maintenance margin levels must be met. Both the initial and maintenance margin level requirements are specific to each financial instrument

Leverage & Margin

How do I calculate my
Margin Requirements?

Initial Margin = (position’s opening price*size of the trade)*initial margin percentage. For example, you buy 30 Facebook stocks CFDs for $75 each (a 'Buy' position), then the value of the position would be 30*75=$2,250. If the Initial margin percentage were 20%, the required initial margin would be 20%*2,250=$450. Maintenance Margin = (position’s opening price*size of the trade)*maintenance margin percentage. For example, you buy 30 Facebook stocks CFDs for $75 each (a 'Buy' position), the value of the position would be 30*75=$2,250. If the maintenance margin percentage were 10%, then the required maintenance margin would be 10%*2250=$225.