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 & you’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 you’d get stopped out.

You have 50K, you buy 10 BTC at $7k with 1:2 leverage. Thus, you’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 you’ve invested 35K, you’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, you’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, you’d need to lose 50K - 17.5K in order to get stopped out.
That would be a loss of 32.5K. Let’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, it’d have to move by -> 32.5K / 10 = 3,250
Initial opening price 7K - 3,250 = 3,750 - it’s as simple as that.