Margin Calculator
Calculate the margin required to open a position and see how different leverage levels affect your capital requirements.
Calculate Required Margin
Margin Requirements
Required Margin
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Position Value
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Margin at Different Leverage Levels
Formula
How Margin and Leverage Work
Margin is the amount of money your broker sets aside from your account as collateral to open a position. It's not a fee — it's more like a security deposit that gets returned when you close the trade.
Leverage allows you to control a larger position with a smaller amount of capital. At 1:100 leverage, you can control $100,000 worth of currency with just $1,000 in margin.
The Formula
Required Margin = (Lot Size × Contract Size × Exchange Rate) / Leverage
For EUR/USD at 1:100 leverage with 1 standard lot:
Margin = (1 × 100,000 × 1.0850) / 100 = $1,085.00
Higher Leverage = Lower Margin, Higher Risk
While higher leverage reduces your margin requirement, it also amplifies both profits and losses. A 1% price move against you at 1:500 leverage means a 500% loss relative to your margin. This is why regulators in the EU and Australia have capped retail leverage at 1:30 for major pairs.
Frequently Asked Questions
What happens if I run out of margin?
You receive a margin call when your equity drops below the required margin level (typically 50–100% depending on the broker). If you don't deposit more funds or close positions, the broker will automatically close your trades — this is called a stop-out.
Is higher leverage always better?
No. Higher leverage means smaller margin requirements, but it also means you can take larger positions relative to your account — increasing the risk of significant losses. Most experienced traders use moderate leverage (1:30 to 1:100) even when higher is available.
What's the difference between margin and balance?
Your balance is your total account value. Used margin is the portion reserved for open positions. Free margin (balance minus used margin plus/minus floating P&L) is what you have available to open new positions.
Why do regulators limit leverage?
To protect retail traders from excessive losses. ESMA (EU), ASIC (Australia), and other regulators cap leverage at 1:30 for major pairs (1:20 for minors) because high leverage is the primary reason retail traders lose more than they deposit.
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