Everything you should know about Margin

Margin is a term that traders use to describe the amount of money they have in their accounts to open a trade. To retain an open position, you must also always retain sufficient margin in your account.

Margin is used in forex and CFD trading to allow a trader to take positions of a higher value than the amount of funds in their trading account. The amount is not borrowed money but is part of the balance. This ensures there will be funds in the account to cover potential losses in the event of volatile market conditions.

The term “margin” is often used interchangeably with "leverage".

Initial Margin, Free Margin, Variation Margin, Total Margin and Margin Level

• Initial Margin is the minimum balance required from your account to open a trade.
• Free Margin, also known as "Usable Margin," is the amount available in your account you can use to open more trades. It is also the amount that allows you to move against the market movement before reaching a margin or liquidation call. It is equivalent to the difference between Equity and Total Used Margin.

Free Margin = Equity* – Open Positions

 *Equity = Balance +- PnL (profit and loss)

• Variation Margin is the unrealized profit (or loss) on open positions or transactions.
• Margin Level indicates the health of your account. It is indicated in percentage terms.

Margin Level = (Equity x 100) / Margin

• Total Margin requirement is simply the sum of these Initial and Variation Margin, and you must maintain at least this amount in your Axi account at all times.

To determine the margin required to open a trading position, please refer to our Required Margin Calculator. 

Dynamic Margin

Please note: Please be aware that this margin type is only accessible for particular accounts within specific regions and servers.

Our dynamic margin structure reduces leverage and increases margin requirements as your open position size increases in accordance with tiers set for each Product group.

For FX and Bullion Spot contracts, the contract specification tables display the Product Leverage which is the leverage you will receive after both the symbol margin rate and Account leverage settings are considered.

The Margin Requirements for Other CFDs are not influenced by your Account leverage but may be influenced by dynamic margin tiers.

For more information, please refer to this Product Schedule.