Leverage & Margin Calculator
CFD trading is mostly done with leverage. The amount of leverage varies from underlying to underlying. In the EU, the levers are limited by the regulation of ESMA. The standard levers for CFD trading in the EU are as follows:
- Leverage 1:2 for cryptocurrencies
- Leverage 1:5 for shares
- Leverage 1:20 for indices and commodities
- Leverage 1:30 for Forex
Leverage multiplies the capital you deposit in the CFD account. The capital that you use for a CFD position is called margin. The margin is multiplied by the leverage depending on the CFD and its underlying, which means that you trade more capital than you actually have deposited as margin.
When CFD trading, it is important to know exactly how the leverage affects the margin and the CFDs. Only then can you properly assess and weigh the risk of CFD trading. Because the higher the leverage, the higher the profits, of course. What must not be forgotten, however, is that this can also increase the losses. The higher the leverage, the faster the total loss can occur, or the CFD position with 100% can be in the red.
In order to know beforehand exactly how much money you will actually move in the market with the leverage, we have created our CFD calculator.
How do I calculate leverage and margin in CFD trading?
With the Leverage & Margin Calculator you can interactively test the impact of the leverage on the margin. Simply enter the amount of margin you want to use for a CFD trade.
After that, select the leverage that applies to the CFD you want to use.
Finally, you have to choose whether you want to bet on rising markets (long) or on falling markets (short). With long CFDs you lose money when the market falls. With short CFDs you lose money when the market rises.
Our calculator will give you the percentage change in price based on the leverage until the CFD position is -100%.
Here it can come to the total loss, if you have not deposited further capital on your CFD account as free margin.
You can find more information about margin in this video: