How is Margin for Precious Metals Calculated?

The formula for calculating the margin of precious metals is: margin = lot size * market price * contract volume / leverage.

Take gold as an example. Assume that the market price of gold is: $1,806.00, the contract volume is 100 ounces, and the leverage is 500 times, then the margin for one lot of XAUUSD is $361.2:

  • Calculation formula: lot size (1) * market price (1,806) * contract volume (100) / leverage (500) = 361.2

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Trading in financial instruments involves high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding the investor’s initial investment could incur within a short period of time. The past performance of a financial instrument is not an indication of its future performance. Please make sure you read and fully understand the trading risks of the respective financial instrument before engaging in any transaction with us. You should seek independent professional advice if you do not understand the risks disclosed by us herein.

Trading in financial instruments involves high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding the investor’s initial investment could incur within a short period of time. The past performance of a financial instrument is not an indication of its future performance. Please make sure you read and fully understand the trading risks of the respective financial instrument before engaging in any transaction with us. You should seek independent professional advice if you do not understand the risks disclosed by us herein.