What Is the Formula for Calculating the Required Margin Given a Leverage Level? ⎊ Path

What Is the Formula for Calculating the Required Margin Given a Leverage Level?

The required margin is calculated as the notional value of the position divided by the desired leverage level. For example, a $10,000 notional position with 10x leverage requires $1,000 in margin ($10,000 / 10).

This simple calculation determines the initial collateral needed to open the position.

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Glossar

Required Margin

Requirement ⎊ Required margin represents the minimum amount of capital or collateral that must be held in a trading account to maintain open leveraged positions in derivatives markets.