Free Margin Calculator
Calculate the required margin for any trade. Enter your position size, price, and leverage to see exactly how much capital your broker will hold as collateral.
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Margin is the deposit your broker requires to open a leveraged position. The higher your leverage, the less margin you need, but the more risk you take on. The formula is the same regardless of what you trade.
Required Margin = (Position Size × Current Price) / Leverage
For forex, one standard lot equals 100,000 units of the base currency. So a position size of 1 lot at a price of 1.0850 means you are controlling $108,500 worth of currency. Your broker does not require the full amount; they only require a fraction based on your leverage ratio.
Forex Example
1 standard lot EUR/USD at 1.0850 with 50:1 leverage
Position value = 100,000 × 1.0850 = $108,500
Required margin = $108,500 / 50 = $2,170.00
Stock Example
100 shares of AAPL at $195.00 with 2:1 leverage
Position value = 100 × $195.00 = $19,500
Required margin = $19,500 / 2 = $9,750.00
What Is a Margin Call?
A margin call happens when your account equity falls below the broker's maintenance margin requirement. If your losing position reduces your free margin to zero, the broker may close your trades automatically. Always monitor your margin level and use stop losses to prevent margin calls.
Margin Level Explained
Margin level is the ratio of your account equity to your used margin, expressed as a percentage.
Margin Level = (Equity / Used Margin) × 100%
Most brokers issue a margin call at 100% margin level and force-close (stop out) your positions at 50%. For example, if you have $5,000 in equity and $2,500 in used margin, your margin level is 200%. If a losing trade drops your equity to $2,500, your margin level hits 100% and you will receive a margin call.
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Frequently Asked Questions
What is margin in trading?
Margin is the amount of money your broker requires you to deposit to open a leveraged position. It acts as collateral. You do not pay margin as a fee; it is held by the broker while your trade is open and returned when you close it.
How much margin do I need for forex?
It depends on your lot size, the currency pair price, and your leverage. With 50:1 leverage trading 1 standard lot of EUR/USD at 1.0850, you need approximately $2,170 in margin.
What leverage should I use?
Most professional traders use 10:1 or lower. Higher leverage amplifies both gains and losses. If you are a beginner, start with 5:1 or 10:1. Regulators in the US cap retail forex leverage at 50:1, and in Europe at 30:1.
What happens if I run out of margin?
Your broker issues a margin call, asking you to deposit more funds. If you do not add funds or close positions, the broker will automatically liquidate your positions at the current market price. This can result in significant losses.
Is margin the same as leverage?
No. Leverage is the ratio of position size to margin (e.g., 50:1 means you control $50 for every $1 of margin). Margin is the actual dollar amount you must deposit. They are inversely related: higher leverage means lower margin requirements.