Want to know everything about our leverage and margin requirements? In this article you will learn about:

• What is leverage?
• Unlimited Leverage
• Leverage requirements
• Dynamic margin requirements
• Fixed margin requirements
• Higher margin requirements (HMR)
• How to calculate margin

What is leverage?

Leverage describes a ratio of borrowed funds against the trader’s funds. With leverage, the trader can open orders of much larger volumes than they would otherwise be able to. This ratio of trader equity to loaned capital is termed leverage, and is expressed by its ratio, e.g. 1:200, 1:2000, or 1:Unlimited. While the trader can earn significantly more with leverage, they can amplify potential loss too. Therefore, it’s important to assess the risks, and make use of stop orders and limit orders to mitigate potential loss.

The amount of leverage available depends on your trading account’s current equity among other factors. Follow the link to find out how to change your leverage.

Note: For clients registered with Tadenex Limited (our Kenyan entity), the maximum available leverage is 1:400.

Unlimited leverage

Unlimited leverage is the highest leverage setting on offer, available for all Exness account types. This setting is not available by default and is more suitable for experienced traders who want to open larger positions or try different strategies.

As unlimited leverage carries higher risks of loss of capital, the following prerequisites and conditions are in place to limit exposure while still providing experienced traders this exclusive service:

• The trading account must have equity of less than USD 1 000.
• The trader must close at least 10 orders (excluding pending orders) with a minimum value of 5 lots (or 500 cent lots) across all real trading accounts in their Personal Area.

When all the criteria are met, the option for unlimited leverage will appear in any qualifying trading account’s leverage settings. Follow the link to find out how to change your leverage.

Be aware that the Stop Out Protection feature may not be available on trading accounts with unlimited leverage, in order to strike a balance between trader benefits and risks. Follow the link to our article on Exness Market Protection Tools for more information about this feature.

Leverage requirements

When unlimited leverage is active, the maximum leverage available automatically changes if your trading account's equity increases to certain levels. These levels of leverage requirements are outlined in the useful table below:

Read our Leverage and margin requirements rules for more information.

Unlimited leverage is not available for the following trading instruments:

• Exotic (currency pairs)
• Cryptocurrencies
• Energies
• Stocks
• Indices

These instruments present fixed margin requirements, so they are not affected by unlimited leverage. Follow either link for more on the classification of trading instruments or for their contract specifications.

Dynamic margin requirements

Most trading instruments have dynamic margin requirements, meaning that the margin requirements change as leverage changes - the bigger the leverage, the smaller the margin requirements and vice versa. Other factors can modify margin requirements such as the publication of economic news, and opening orders soon to the open and close of market trading hours.

For instruments with dynamic margin requirements, leverage automatically changes:

• When your account equity changes
• During the publication of important economic news
• 3 hours before and 1 hour after weekend market closure and holiday breaks

You can verify the margin requirements of any trading instrument yourself with the Investment Calculator, or read about margin requirements and leverage rules on our website for more.

Fixed margin requirements

Some trading instruments present fixed margin requirements, meaning that regardless of the leverage set, the margin required to open an order remains the same.

These financial instruments include the groups:

• Exotic (currency pairs)
• Cryptocurrencies
• Energies
• Stocks
• Indices

The margin held for these instruments will depend on the instrument and is not affected by the leverage set (including unlimited leverage). These instruments are also always subject to higher margin requirement rules, detailed below.

Higher margin requirements (HMR)

A higher margin requirement is set during some key events and specific time periods, which impact the general volatility of the market. In most cases, the maximum leverage available for new orders opened during this time is set to 1:200 automatically. Should this impact any of your trading accounts, you will receive an email notification with details.

The Exness Terminal list of instruments displays a three-red-lines symbol beside instruments affected by the high margin requirements (HMR) period. Hovering the mouse over this symbol displays the duration of this HMR period.

HMR period can be extended based on risk management decisions depending on each news’ impact. For full details regarding the affected instrument and HMR duration, please check your trading platform MailBox, where you will find an email sent to you with the list of affected instruments.

Instruments with dynamic margin requirements

Higher margin requirements, resulting in a maximum leverage of 1:200, are applied to new orders or orders reopened as a result of other closed positions during:

• News releases
• Weekends and public holidays

News releases

When important economic news is published that involves a trading instrument, orders opened 15 minutes before and 5 minutes after the news release will have higher margin requirements applied (max 1:200 leverage).

This mitigates a trader's exposure to the risk of price instability during economic events. 5 minutes after the news release, higher margin requirements are lifted and the margin is recalculated based on the equity of the trading account and its set leverage.

Weekends and public holidays

Forex and metal trading instruments are subject to trading breaks during the weekend and public holidays. Higher margin requirements (max 1:200 leverage) are applied to these instruments in the 3 hours before the market closes, and for 1 hour after the market reopens.

Instruments with fixed margin requirements

Here is a list of cases when the higher margin requirement (HMR) is applicable for instruments with fixed margin requirements:

1. For Stocks,
   1. HMR of 20% (maximum leverage 1:5) is applicable 6 trading hours before and lasts until 20 minutes after the publishing of its company financial report. This only applies to the specific stock affected. Here is a link to the stock announcement dates.
   2. HMR of 20% (maximum leverage 1:5) for stocks is also applicable 15 minutes before market closing time up until 20 minutes after the market reopens.
2. Energies like UK Oil and US Oil have a HMR of 5% (maximum leverage 1:20). both during market closure and during news releases. XNGUSD has a fixed margin rate (FMR) of 5%. However, during HMR, leverage will be limited to 2% (maximum leverage 1:50).
   1. USOil - Starts 5 hours prior to the market closure on Friday and ends 49 mins after the market opening
   2. UKOil - Starts 9 hours prior to the market closure on Friday and ends 20 mins after the market opening
3. All orders placed on Gold within 30 minutes of the daily break, economic news, weekends, and holidays, are subject to HMR, with leverage restricted to 1:1000 or less.
4. Indices have HMR everyday which varies for each index.

BTCUSD and BTC pairs will have a FMR during the HMR.

How to calculate margin

Whenever you want to open an order, it is extremely important to make sure that you have sufficient funds in your account to open and maintain the order. Our article about how to start trading goes into more detail about this, but it is important to understand how much margin is required for an order.

Calculation

Margin is calculated both based on the trading instrument and, for most trading instruments, according to the leverage set on your trading account. Some instruments have fixed margin requirements which disregard the leverage set on that trading account. Below are some examples of the formula used to calculate margin.

Margin requirements that depend on leverage

Margin = Lots x Contract Size / Leverage Size

Let’s take 2 lots of EURUSD as an example, with leverage of 1:2000.

• Lots: 2
• Contract size: EUR 100 000
• Leverage size: 2000

Margin = 2 x 100 000 / 2 000 = EUR 100 (margin is always calculated in the base currency).

Margin requirements that do not depend on leverage

Margin = Lots x Contract size x Required margin

Let’s take 0.5 lots of GBPSEKm.

• Lots: 0.5
• Contract size: GBP 100 000
• Required margin: you can find this in our contract specifications. In this example the required margin is 1%

Therefore, margin = 0.5 x 100 000 x 0.01 = GBP 500

Margin calculation for hedged orders

We charge 0% margin for completely hedged orders on instruments from the following groups:

• Forex Currency Pairs
• Metals
• Cryptocurrencies
• Indices
• Stocks
• Energies

Let us look at two examples here:

Example 1 - Margin calculation for fully hedged positions

Client has the following orders with the leverage set at 1:2000:

1. 5 lots EURUSD Buy
2. 5 lots EURUSD Sell

Margin charged in the above case will be 0 since the trading volume and the instrument are the exact same.

Note: If the instrument itself or the instrument suffix doesn’t match, the orders cannot be considered as hedged and margin will still be charged.

Example 2 - Margin calculation for partially hedged positions

Client has the following orders with the leverage set at 1:2000:

1. 5 lots EURUSD Buy
2. 3 lots EURUSD Sell

In such cases, 3 lots of EURUSD is considered hedged and the remaining 2 lots EURUSD buy is considered unhedged. Thus, margin will only be charged for the unhedged position.

Margin charged = (Lots x contract size) / Leverage

= (2 x 100000)/2000

= 100 EUR

While understanding how margin is calculated is important, Exness is proud to present the Investment Calculator; a powerful tool that can help you calculate the margin requirements for any trading instrument at any leverage rate within seconds.