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Margin on 10 lots when the first $500,000 of notional is 1:500 and the rest 1:200

A broker advertising 1:500 often means up to 1:500, and for larger positions the ratio steps down. A schedule might read: the first $500,000 of notional at 1:500, anything above at 1:200. I made that schedule up, but it shows the sums to do before stacking size.

Take 10 lots of EURUSD at 1.0850. Notional is 10 x 100,000 x 1.0850 = $1,085,000.

Flat 1:500 would need 1,085,000 / 500 = $2,170 of margin.

With the tiers, the first $500,000 at 1:500 needs $1,000. The remaining $585,000 at 1:200 needs $2,925. Total $3,925. The effective leverage on that position is 1,085,000 / 3,925, which is 276 to 1, not 500.

At 20 lots the notional is $2,170,000. Tiered margin is 1,000 + (1,670,000 / 200) = $9,350, against $4,340 under a flat 1:500. Doubling the size more than doubles the margin, and effective leverage falls to 232.

Why this matters: on a $5,000 account holding those 10 lots, margin level is 5,000 / 3,925 = 127% rather than 230%. If the broker stops out at 50%, equity can fall to $1,962 under the tiered rule but to $1,085 under the flat one. At $100 a pip for 10 lots, that is a cushion of about 30 pips against 39 pips. A 10 lot position on $5,000 is silly, of course. It just makes the gap visible.

Whether the tiers apply per position, per symbol or across the whole account changes everything, and the answer is usually in a leverage table or the contract specification, not in the headline.

Tiers usually apply to total exposure per symbol, sometimes per account, so several smaller trades can add up to the higher tier just like one large position. Some brokers also reduce leverage around weekends and big events. An EA that opens positions near the tier boundaries should calculate margin with OrderCalcMargin rather than assume the advertised leverage.

Marginal cost is the clearer way to see a tier. One lot of EURUSD at 1.0850 is $108,500 of notional. Inside the first tier that needs $217 of margin at 1:500. Past the boundary the same lot needs $542.50 at 1:200, two and a half times as much. The boundary sits at 500,000 / 108,500, which is 4.6 lots, so the first 4.6 lots cost $1,000 in total and each lot after that costs $542.50. If the schedule applies to each position separately instead of the whole exposure, ten 1 lot orders might all sit in the cheap tier, which is why some brokers aggregate by symbol. You only learn which applies by opening positions and watching the Margin figure.

Leverage can also change for reasons that have nothing to do with your size. Some brokers cut leverage ahead of weekends or around major events, and some lower it once equity passes a set level. Take 10 lots at 1.0850: $2,170 of margin at 1:500, but $10,850 at 1:100. On a $5,000 account the second figure is more than the whole balance, so a leverage cut announced for Friday evening could force a close or a margin call without a single pip of price movement. If you hold size over a weekend, check the broker's notices for the temporary leverage rules, and recompute margin at the lower ratio before you leave the desk.

MT5 has OrderCalcMargin, which asks the server what margin a given order would need. It prices that order on its own and ignores positions you already hold, so it cannot show how a tier changes when you add to an existing exposure. A simple test does the job. Open 1 lot and note the Margin figure on the Trade tab, say $217. Add lots in steps and watch the total. If 10 lots shows $2,170 the schedule is flat, and if it shows $3,925 the step is real. Work out the difference between consecutive readings and you have the marginal margin per lot, which is the number you need when deciding whether the last lot is affordable. Do it on a demo with the same symbol if the broker offers the same schedule there.

In practice, risk rules usually stop you well before tiers matter. Take a $5,000 account risking 1%, so $50, with a 20 pip stop. Size is 50 / (20 x 10) = 0.25 lots, a notional of $27,125, and margin of $54 at 1:500 or $136 at 1:200. That is 1% to 3% of equity. Now shrink the stop to 1 pip: 50 / 10 = 5 lots, a notional of $542,500, and the position finally crosses the $500,000 boundary. Margin becomes 1,000 + 42,500 / 200 = $1,212.50 instead of $1,085. So tiers only bite for very tight stops, which means scalpers and news traders are exactly the people who need to know the schedule.