Margin

Margin is the amount of money your broker holds from your account as collateral for a leveraged position. It's not a fee or a cost — it's a deposit that gets released when you close the trade (minus any losses). Think of it like a security deposit on a rental apartment.

The margin required depends on the leverage ratio. With 1:100 leverage, you need $1,000 in margin to control $100,000 (one standard lot of EUR/USD). With 1:30 leverage, you'd need $3,333 for the same position. Your broker calculates and displays margin requirements automatically.

Understanding the relationship between margin, equity, and margin level is critical. Your margin level = (equity / used margin) × 100%. If your margin level drops below the broker's margin call level (typically 50-100%), they'll alert you. If it drops below the stop-out level (typically 20-50%), they'll start closing your positions automatically to prevent your account from going negative.