# CFD margin calls

@dropbrick There are simpler ways to think about this. As a general rule of thumb, if you have \$1,000 in your account & youâ€™ve invested all of the \$1,000, your margin bar is exactly at 50%. If your account balance should drop to 50% of the invested funds (\$1,000 margin), then youâ€™d get stopped out.

You have 50K, you buy 10 BTC at \$7k with 1:2 leverage. Thus, youâ€™re gonna need 10 x 7,000 / 2 in margin = 35K.

Going by the over 50% formula -> [50K / (50K +35K)] x 100 = approx. 58%

To receive a margin call, the margin indicator needs to hit 50%. Going by what I initially said, that happens when your total funds are equal to your margin (invested funds). In this case, since youâ€™ve invested 35K, youâ€™d need to lose 15K for the margin bar to hit 50%.

E.g. [35K / (35K +35K)] x 100 = 50%
To lose 15K when you have 10 BTC, youâ€™d need BTC to move 1,500.

To get stopped out, your total funds must drop to 50% of your margin / invested funds which are 35K.
35K / 2 = 17.5K
Thus, from the starting point of 50K, youâ€™d need to lose 50K - 17.5K in order to get stopped out.
That would be a loss of 32.5K. Letâ€™s see if we got it right.

Under 50% -> (Total funds / Blocked funds) x 50%
(17.5K / 35K) X 50 = 0.5 x 50 = 25%

For you to lose 32.5K with 10 BTC, itâ€™d have to move by -> 32.5K / 10 = 3,250
Initial opening price 7K - 3,250 = 3,750 - itâ€™s as simple as that.

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