When engaging in a Contract for Difference, you are only required to deposit a percentage of the contract’s full value. This is called a margin and it allows traders to open large positions while investing a fraction of the value. The margin is used as leverage, giving traders full exposure to the position. A margin is required before opening a position on your account.
Your account should also hold extra funds to cover any potential losses and stop your account from going into a margin call. Always remember, that leverage is a double-edged sword. While it can maximise your profits, it can also increase your losses.
Please note: for all Eightcap clients with a live trading account, you can access your own margin calculator on the client portal. Simply click on this link to be redirected.