Margin calculator
Calculate required margin for your forex trades
📊 Understanding Margin
Margin is the amount of money required in your account to open and maintain a leveraged position. It's essentially a security deposit that your broker holds to cover potential losses.
Leverage allows you to control a larger position with a smaller amount of capital. For example, with 1:100 leverage, you can control a $100,000 position with just $1,000 in margin.
🔍 How Margin Is Calculated
The margin calculation involves several components:
- Trade Value: Lot size × Contract size × Current price
- Required Margin: Trade value ÷ Leverage
- Margin Percentage: (Required margin ÷ Trade value) × 100
- Free Margin: Account balance - Used margin
❓ Frequently Asked Questions
What is leverage in forex trading?
Leverage is a tool that allows you to control a larger position with a smaller amount of capital. It's expressed as a ratio (e.g., 1:100 means you can control $100,000 with $1,000).
How does leverage affect margin requirements?
Higher leverage means lower margin requirements. With 1:100 leverage, you need 1% margin. With 1:500 leverage, you need only 0.2% margin. However, higher leverage also means higher Risk.
What is free margin?
Free margin is the amount of money in your account that's available for opening new positions. It's calculated as your account balance minus the margin used by your current positions.
What happens if I don't have enough margin?
If you don't have enough margin, your broker may close some of your positions (margin call) or prevent you from opening new positions. Always maintain adequate free margin.