How Is the ‘Margin Requirement’ Calculated for a Leveraged Position?
The margin requirement is the minimum amount of capital a trader must deposit and maintain in their account to open and hold a leveraged position. It is calculated as a percentage of the total value of the position.
For example, if a position is $10,000 and the initial margin requirement is 10% (10x leverage), the trader must deposit $1,000. This amount acts as collateral and is the maximum loss the trader can sustain before the exchange initiates liquidation.
