Forex & CFD Margin, Leverage & Stop-out Calculator

About the Forex & CFD Margin, Leverage & Stop-out Calculator

Forex and CFD brokers lend you most of a position’s value and hold a small part of it, the margin, as security. This calculator works out the margin of up to ten positions, their profit or loss, your equity, available margin (equity less used margin) and margin level, and the price of each position at which the broker would issue a margin call or start closing positions (stop-out), with the others held where they are.

The margin rates start from the retail rules of your country — ESMA’s limits in the EU (3.33% for major currency pairs), the FCA’s in the UK, ASIC’s in Australia, the 4% FX minimum of Japan’s rules for individuals and the NFA’s security deposits for US forex — each linked to the regulator’s text. In Canada, the UAE, Saudi Arabia and elsewhere you type your broker’s rates. Every rate is editable, because brokers may ask for more than the minimum.

It also shows the move against all your positions at once that would reach the stop-out level, pip values and your effective leverage. Exchange rates between a position’s currency and your account’s can be typed or filled from the European Central Bank’s reference rates when you ask.

Common uses

• Check how much margin one lot needs under your country’s retail rules before you trade.
• See how far a position can fall before a margin call or a stop-out.
• Find your available margin and margin level with several positions open.
• Compare the leverage of a forex pair, an index CFD and a share CFD.

The formulas

• Margin = units × price × margin rate × conversion to the account currency.
• P&L = side × (price − open price) × units × conversion.
• Equity = balance + the P&L of every position; available margin = equity − used margin.
• Margin level = equity ÷ used margin × 100%.
• Stop-out price of one position: the price P where equity(P) = stop-out level × margin(P), with the other positions held. With the margin on the current price both sides move with P; with it on the open price only the equity does.
• Pip value = units × pip × conversion (a pip is 0.0001, or 0.01 for yen pairs).

The retail margin rules are ESMA’s Decision 2018/796) (replaced by national measures, as ESMA explains), the FCA’s COBS 22.5, ASIC’s CFD product intervention order, the Financial Futures Association of Japan’s leverage rules and NFA Financial Requirements Section 12. Margin level and stop-out work as trading platforms such as MetaTrader document them.

Reading the results

• Margin required is what your open positions tie up now.
• Margin level above the margin-call level means no call; at the stop-out level the broker starts closing positions, usually the one losing most first.
• Margin-call and stop-out prices show how far each position can move against you, the others held. The adverse move to stop-out is the percentage by which every position would have to move against you at the same time.
• Effective leverage is the value of all positions divided by your equity: at 20×, a 1% move against you costs 20% of your equity.

What it leaves out

Spreads, commissions, overnight swaps (the forex swap calculator works them out), slippage and price gaps past the stop-out level, a broker’s lower margin on hedged positions, and changes of the exchange rates between your positions and your account. India: the Reserve Bank of India allows residents forex dealings only through authorised persons and RBI-authorised platforms or recognised stock exchanges, so no CFD rates are preset there (RBI’s caution on unauthorised forex platforms).

Limitations

• Rates are the regulators’ retail minimums: brokers may ask for more, and professional clients are not covered.
• Conversion rates are held at the rate you enter; in reality they move too.
• Each position’s margin-call and stop-out price holds the other positions where they are.
• It calculates from your numbers and uses no market data: it says nothing about where any price is going.

Privacy

Everything happens in your browser. What you enter or open here is not uploaded or stored by MySmartCoPilot. Downloads the ECB’s daily reference exchange rates when you ask for them; the amounts you enter are never sent.