advantages of commodity trading

At XM, in addition to Forex you can trade CFDs commodity, but the margin calculation formula is different from one for Forex.

This article introduces the required margin calculation in CFD transactions.

How to calculate required CFD margin

  • [Lot number]×[Value per lot]×[Opening price]×[Deposit Percentage]

Regarding [Value per lot] and [Deposit percentage] of CFDs, you can refer to commodity page of the official XM website.

Example 1 (Future CFDs margin)

For example, buying(or selling) NGAS 10 lots at 2.65. (USD Account)

1. First, refer to [value per lot] and [deposit percentage] from commodity page of the official XM site.

CFD commodity margin

2.Can already identify [value per lot] at 1000, [margin level] at 3%.

3. Combine [10 lot] [2% margin] [Opening price 2.65] with the formula below.

  • [Lot number]×[Value per lot]×[Opening price]×[Deposit Percentage]

10(lot number)×1,000(value per lot)×2.65(opening price)×2%(margin percentage)=530USD

4. The required deposit can be identified

In short, if you buy (sell) 10 lots of NGAS at 2.65, the required deposit will be $530 (capital)

Because 1 lot is the smallest transaction size, the required deposit will be $ 53 if you buy one lot.

Example 2 (Cash indices CFDs margin)

Buying (or selling) 10 lots of EU50 at 2977. (EUR account).

1. First, refer to [value per lot] and [deposit percentage] from commodity page of the official XM site.

CFD stock index

2. Now you can confirm [Value per lot] as 1, [Deposit Percentage] as 1%.

3. Apply [10 lot] [Required margin 1%][Opening price 2977] to the formula below.

  • [Lot number]×[Value per lot]×[Opening price]×[Deposit Percentage]

10 (lot number) × 1(value per lot)×2977(opening price)×2%(margin percentage)=595.4EUR

4. You can now calculate the required deposit

In short, buying (or selling) 10 lot when EU50 is priced at 2977 means you will need 595.4 EUR required deposit (capital).

The smallest transaction size is 1 lot, so if you buy 1 lot, the required deposit would be 59.54 EUR.

Notes

[value per lot] and [deposit percentage] are periodically changed. It is better to confirm before transaction from commodity page of the official XM website.

In addition, prices will fluctuate depending on the market at that time. If you trade with a trading volume close to required deposit, it will immediately become Stop Loss. Therefore, when dealing with CFDs, , do deposit above the required amount