When trading CFDs, your CFD broker requires you to have a certain amount of cash equity in your CFD trading account
. When you open a CFD position, your trading account must have enough cash to fund their margin requirements. Your CFD provider’s margin requirements are typically listed on their website or in their Product Disclosure Statement. The mathematical equation for calculating your margin requirements is: Margin Percentage x (Contract Quantity x CFD Price) = Margin Requirement. For example, your margin requirements when opening a long position for Telstra (TLS) for 1,000 Share CFDs at $3 with a margin of 5% would be: 5% x (1,000 x $3) = $150. $150 would be your margin required. Your margin requirement for your CFD position is a dynamic number. As the price of the underlying security fluctuates, your margin will also change. Therefore if the underlying security falls in value, your margin requirements are reduced, while if the share price in increases you’ll have a larger margin requirement. For example if TLS increases to $4: 5% x (1,000 x $4) = $200. Your margin requirements have increased by $50 to $200.