Calculate required margin, free margin and margin level for any leveraged position in forex, CFDs or stocks.
Margin is the deposit your broker requires you to set aside as collateral when you open a leveraged position. It is not a fee and it is not the cost of the trade — it is a portion of your own funds that the broker locks up to cover potential losses while the position is open. Leverage and margin are two sides of the same coin: 50:1 leverage simply means you only need to post 1/50th (2%) of the position's value as margin. This calculator shows you exactly how much will be tied up, how much remains free, and how close you are to trouble.
The three numbers that matter are required margin, free margin, and margin level. Required margin is the collateral locked for your open positions. Free margin is what is left over to absorb losses or open new trades. Margin level — your equity divided by used margin, as a percentage — is the health gauge brokers watch. When it falls toward 100% you risk a margin call; below the stop-out level (often 50%) the broker starts force-closing your positions whether you like it or not.
Understanding these figures is what separates controlled leverage from reckless leverage. The same account can hold a comfortable position with plenty of buffer or an over-leveraged one that gets liquidated by a minor adverse move. By checking your margin before you enter, you can see how much room you have for the market to move against you — and avoid the forced exits that turn a manageable loss into a closed account.
Required Margin = Position Value ÷ Leverage. This is the amount locked by your broker as collateral.
Free Margin = Account Balance − Required Margin. This is available to open new positions or absorb losses.
Margin Level = (Account Balance ÷ Required Margin) × 100%. Most brokers issue a margin call below 100% and stop out below 50%.
When your margin level drops below your broker's margin call level (typically 100%), you must deposit more funds or close positions. If it reaches the stop-out level (typically 50%), the broker automatically closes your largest losing position.
Higher leverage amplifies both profits and losses. Professional traders rarely use full leverage — they size positions based on risk percentage of account, not maximum available leverage.
Margin is how much capital the broker locks to open the position; risk is how much you actually stand to lose if the trade goes against you to your stop. They are unrelated numbers — a position can require small margin yet carry large risk if you have no stop or a wide one. Always set risk with the Position Size Calculator, then use margin only to confirm the position fits your account.
The more the better. A large free-margin buffer lets your trades breathe through normal volatility without triggering a margin call. As a rough guide, keeping used margin well under half your equity means even a sharp adverse move is unlikely to force a stop-out. Traders who routinely run margin level near 100% are one bad candle away from liquidation.
The mistake that ends most leveraged accounts is treating maximum available leverage as a target rather than a ceiling. Just because a broker offers 500:1 does not mean you should use it. Decide your position size from the dollar risk you are willing to take on the trade, then let the margin calculation simply confirm that the position is comfortably within your account — not the other way around.
Combine this tool with the Position Size Calculator to fix risk first, the Pip Value Calculator to translate stop distance into dollars on forex pairs, and the Drawdown Recovery Calculator to appreciate why a forced liquidation is so costly. Leverage is a tool; respected, it magnifies a good process, and ignored, it magnifies a single mistake into ruin.