Margin Call calculation questions

[padi]

Hi,

 

I am a beginner currency trader, focussing only on USDJPY.

I am trying to calculate total money I need (as potential useable margin and margin), to accommodate market swings.

 

For example,

Let's say I want to go long on USDJPY (entering at 113.00), with minimum size of 50K, with minimal margin required of 0.5%, minimum margin required is 0.5%, that will be 1:200, that will be 250USD.
 

If the market swings against me by 50 pips or 100 pips, going to 112.50 or 112, and I want to hold my open long position, I would like to know the additional useable margin I will need so that I can keep my positions open.

 

Please let me know if my calculations are correct or if they are wrong, please let me know the right way of calculating the required additional margin, if market moves against me (and I want to open my position).

 

 

Scenario 1: 50 pips movements, how much USD is needed for potential margin?

1 pips = 0.01 JPYUSD - 1 JPY = 0.009 USD - 1 pips = 0.09/10 JPY = 0.009 JPY or 0.00008 USD, 

50 pips = 0.004 USD.
With leverage of 1:200, 50 pips = 0.8 USD.
Lot size = 0.05 x 100,000 = 50,000
0.8*50K = 4K
Margin required on 4K = 0.5% = 20USD. <Is this correct?

 

Scenario 1: 100 pips needs how many dollar of margin?
1 pip = 0.00008 USD
100 pips = 0.00008 USD x 100 = 0.008 USD
With leverage of 1:200, 100 pips = 0.008USD x 200 LEVERAGE = 0.8 USD.
With lot size of 0.05 x 1000,000 = 50,000,100 pips = 0.8USD x 50,000 units = 40K.
Using 0.5% margin, 40K requires, 200USD deposit. <Is this correct?

[JamesIG]

If you are looking to trade $50,000 dollars worth of this main lot you are looking at trading half a contract. This would amount to 500 JPY per point movement (half of the "value of one point"). If the market was at 113 your starting margin, assuming you have no stops in place, would be $250 (or 28,250 JPY). If the market drops you're still going to have a margin requirement of $250, (however this will then be worth 28,000 JPY). This is because the notional value of $50,000 remains the same.

Running loss

If you are looking at a 50 point movement against you then you would be looking at a running loss on that trade of 25,000 JPY. If the exchange rate is 112.5 then you'd need $222.22 to cover the running loss.

If you are looking at a 100 point movement you would be looking at a running loss on that trade of 50,000 JPY. If the exchange rate is 112 then you'd need $446.42 to cover the running loss.