Margin Calculator
Calculate the required margin for your forex trades based on leverage and position size.
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Understanding Margin Trading
What is Margin?
Margin is the collateral required to open and maintain a leveraged position. It's a percentage of the full position value.
Leverage Explained
Leverage allows you to control large positions with less capital. 1:100 means $1 controls $100 worth of currency.
Risk Warning
Higher leverage means higher risk. Keep margin level above 100% to avoid margin calls and stop-outs.
📐 Margin Calculation Formula
Required Margin = (Lot Size × Contract Size × Price) ÷ Leverage Margin = (1 × 100,000 × 1.1000) ÷ 100 = $1,100
📊 Leverage & Margin Requirements
| Leverage | Margin % | Margin for 1 Lot EUR/USD* |
|---|---|---|
| 1:1 | 100% | $110,000 |
| 1:10 | 10% | $11,000 |
| 1:30 | 3.33% | $3,666 |
| 1:50 | 2% | $2,200 |
| 1:100 | 1% | $1,100 |
| 1:200 | 0.5% | $550 |
| 1:500 | 0.2% | $220 |
*Based on EUR/USD rate of 1.1000
Frequently Asked Questions
What is margin in forex trading?
Margin is the collateral required to open and maintain a leveraged trading position. It's not a fee or cost - it's a portion of your account balance set aside as a security deposit. Our free margin calculator helps you determine the exact margin required for any trade.
How do I calculate margin in forex?
Margin is calculated using the formula: Margin = (Lot Size × Contract Size × Price) / Leverage. For example, 1 lot EUR/USD at 1.1000 with 1:100 leverage requires $1,100 margin. Our margin calculator automatically computes this for any currency pair and leverage.
What is margin level and why is it important?
Margin level is (Equity ÷ Used Margin) × 100%. It shows how much of your margin is being used. Below 100% means you're at risk of a margin call. Most brokers require maintaining 50-100% margin level to keep positions open.
What happens during a margin call?
When margin level falls below a certain threshold (usually 50-100%), brokers issue a margin call warning. If it drops further to the stop-out level, positions are automatically closed starting with the largest losing position to free up margin.
What leverage should I use as a beginner?
Beginners should use lower leverage (1:10 to 1:30) to reduce risk. While higher leverage (1:100+) allows larger positions with less margin, it also amplifies losses. Start with low leverage until you develop consistent trading skills.
How is free margin calculated?
Free Margin = Equity - Used Margin. It represents the amount available for opening new positions or absorbing losses from existing ones. If free margin reaches zero, you cannot open new positions and may face a margin call.
What's the difference between used margin and free margin?
Used margin is the amount locked up as collateral for open positions. Free margin is the remaining balance available for new trades. Together they equal your equity. Use our calculator to plan positions that maintain healthy free margin levels.
How does leverage affect margin requirements?
Higher leverage means lower margin requirements. At 1:100 leverage, you need $1,000 margin for a $100,000 position. At 1:500 leverage, you only need $200 for the same position. However, higher leverage also means higher risk per pip movement.
Why do margin requirements differ between brokers?
Margin requirements vary based on broker regulations, leverage offered, and currency pair volatility. Major pairs typically have lower margin requirements than exotic pairs. Always check your broker's specific margin requirements before trading.
Can I use this margin calculator for MT4/MT5?
Yes, our margin calculator works with MetaTrader 4, MetaTrader 5, and all other trading platforms. The calculations are based on standard forex formulas. Simply enter your leverage, lot size, and currency pair to get accurate margin requirements.