The deposit required to open and maintain a leveraged position. Margin is not a fee. It is collateral held by the broker while your trade is open.
What Is Margin in Forex?
Margin is the amount of money your broker requires as collateral to open a leveraged position. It is not a cost or fee. When you close the trade, the margin is released back to your account (adjusted for any profit or loss). With 1:30 Leverage, the margin requirement is 3.33% of the total position value.
Margin Calculation Example
To open a standard Lot (100,000 units) of EUR/USD at 1.0850 with 1:30 leverage:
Position value = 100,000 x 1.0850 = $108,500
Margin required = $108,500 / 30 = $3,616.67
For a micro lot at the same rate: $108.50 / 30 = $36.17. Use our Margin Calculator to calculate margin requirements instantly for any pair, lot size, and leverage ratio.
Margin Calls and Stop-Outs
If your account Account Equity drops below the required Margin Level (typically 50-100% depending on the broker), you receive a margin call. If equity continues to fall, the broker will automatically close your positions (a stop-out) to prevent further losses. Maintaining adequate Free Margin is essential for staying in trades during normal market fluctuations.
Related Terms
Free Margin
The amount of money in your account that is not tied up as collateral for open positions. Free margin equals equity minus used margin.
Used Margin
The total amount of margin currently locked as collateral for all open positions. Also called required margin.
Margin Level
The ratio of account equity to used margin, expressed as a percentage. Margin level = (Equity / Used Margin) x 100%. Below 100% typically triggers a margin call.
Leverage
A mechanism that allows you to control a position larger than your deposit. Expressed as a ratio like 1:30, meaning $1 controls $30 in currency.
Margin Call
A notification from your broker that your account equity has fallen below the required maintenance margin level. If triggered, you must either deposit additional funds or close positions to restore your margin ratio.
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