Understanding and calculating
CFD margins 

In order to open a position on your account you will be required to deposit an amount of money known as margin. The margin you will be required to deposit reflects a percentage of the full value of the position. On our platform this is referred to as the position margin.

The position margin will be calculated using the applicable margin rates, as shown in the product library in the platform.

A selection of the current margin rates for our most popular products are shown in the table below:

*Margin rate means our margin rates as of 7 September 2013

Asset Product Margin rate*
Indices Australia 200 0.20%
Indices UK 100 0.20%
Indices US 30 0.20%
Indices US SPX 500 0.20%
Indices German 30 0.20%
Forex EUR/USD 0.20%
Forex GBP/USD 0.20%
Forex USD/JPY 0.20%
Forex USD/CHF 0.25%
Forex AUD/USD 0.20%
Commodities Gold 0.50%
Commodities Silver 1.00%
Commodities Crude Oil West Texas - Cash 0.75%
Commodities Crude Oil Brent – Cash 0.75%
Treasuries UK Gilt – Cash 0.25%
Treasuries Euro Bund – Cash 0.25%
Treasuries US T-Note 10YR – Cash 0.25%

For certain products, different margin rates may apply depending on the size of your position in that product or the tier your position (or a portion of your position) in that product falls within.

The portion of the position that falls within each tier is subject to the margin rate applicable for that tier.

In order to calculate the position margin, the level 1 mid-price (shown on the platform) is used.

For example, position margin is calculated as follows:

Company XYZ margin rates

Tier Position size (units) Margin rate
1 1-1000 10%
2 1001-3000 15%
3 3001-5000 20%
4 5001-10000 30%
5 Above 10000 50%
CMC Markets

For example:
Based on the margin rates in the table below for Company XYZ ($AU), if a position of 6500 units used the level 1 mid-price of 2.75, ($2.75), the margin would be $3,437.50.

Your position margin requirement is calculated as follows: 

Tier Position size Margin rate Calculation
1 1000 10% 1000 x $2.75 x 10% = $275
2 2000 15% 2000 x $2.75 x 15% = $825
3 2000 20% 2000 x $2.75 x 20% = $1100
4 1500 30% 1500 x $2.75 x 30% = $1237.50
5  0 50%  0
Total 6500   Total = $3,437.50

The notional value of your total position is $17,875.00 ($6,500 x $2.75).

As you can see, trading using margin allows you to open a position by only depositing a percentage of the full value of the position. This means that your losses will be amplified and you could lose more than your initial deposit. Profits and losses are relative to the full value of your position. Trading using margin is not necessarily for everyone and you should ensure you understand the risks involved and if necessary seek independent professional advice before placing any trades.

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