CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
When trading with CFDs (Contracts for Difference), you need to provide a required margin of funds (collateral/reserved funds) in order to open and maintain a position with a given instrument. The required margin is only a portion of the position's total value due to the use of leverage in CFDs.
However, the profit or loss that the position generates is calculated based on the entire held quantity due to the magnifying effect of leverage. The margin of a position is a dynamic value that is calculated and updated live according to the current price responsible for the closure of the position - that is, the Sell price for Long positions and the Buy price for Short positions.
The funds will remain reserved while the position remains open and will be released back to your free funds once the position is closed.
For Example:
Suppose you open a position with 100 CFD units of Gold with a leverage of 1:20 at the current price of $1,728.10. In this case, the margin for opening the position will be $8640.5. These funds will remain reserved until the position is closed.