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

AssetProductMargin rate*
IndicesAustralia 2000.20%
IndicesUK 1000.20%
IndicesUS 300.20%
IndicesUS SPX 5000.20%
IndicesGerman 300.20%
CommoditiesCrude Oil West Texas - Cash0.75%
CommoditiesCrude Oil Brent – Cash0.75%
TreasuriesUK Gilt – Cash0.25%
TreasuriesEuro Bund – Cash0.25%
TreasuriesUS T-Note 10YR – Cash0.25%

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

TierPosition size (units)Margin rate
5Above 1000050%
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: 

TierPosition sizeMargin rateCalculation
1100010%1000 x $2.75 x 10% = $275
2200015%2000 x $2.75 x 15% = $825
3200020%2000 x $2.75 x 20% = $1100
4150030%1500 x $2.75 x 30% = $1237.50
5 050% 0
Total6500 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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