What is margin in forex?
Margin is the part of your balance your broker locks while a position is open. It is not a fee: you get it back when the trade closes. What it limits is how much you can open at once. If losing trades eat into your free margin, the broker can close your positions for you.
How to use the margin calculator
- Pick your account currency and the instrument you want to trade.
- Check the price. Currency pairs and metals fill in automatically; for indices, type the price from your chart.
- Choose your leverage. Use the leverage your broker gives on that symbol, which is often lower on gold and indices than on currency pairs. Pick Custom to type any value.
- Set the lot size. The required margin updates as you type.
Margin formula
Margin = Lots × Contract size × Price ÷ Leverage
The result comes out in the pair's quote currency, and the calculator converts it into your account currency. That is why USDJPY margin starts in yen and ends in dollars.
Margin examples
| Trade | Leverage | Margin |
|---|---|---|
| 1 lot EURUSD at 1.1400 | 1:100 | $1,140 |
| 1 lot USDJPY at 157.59 | 1:100 | ¥157,590 ≈ $1,000 |
| 0.10 lot XAUUSD at 4,286 | 1:100 | $428.60 |
| 1 lot XAUUSD at 4,286 | 1:10 | $42,862 |
| 1 lot NAS100 at 30,600 (contract size 1) | 1:20 | $1,530 |
How leverage changes margin
Leverage only changes how much of your balance is locked. At 1:500 a trade needs one fifth of the margin it needs at 1:100, but every pip is still worth the same. Your risk per pip comes from the lot size, not the leverage.
Margin level and stop out
Your platform shows a margin level: equity divided by used margin, times 100. Brokers set a margin call level and a lower stop out level, where they start closing trades. The levels differ between brokers, so check yours before you trade close to the limit.