In this example, XYZ is trading at $50.01/$50.02. Assume you want to buy 1,000 share CFDs (units) because you think the price will go up. XYZ has a tier 1 margin rate of 20%, which means that you only have to deposit 20% of the position’s value as position margin.
In this example, your position margin will be $10,004 (20% x (1,000 (units) x $50.02 (buy price)). Remember that if the price moves against you, it is possible to lose more than your initial position margin of $10,004.