Calculate Margin Requirements
Common leverage: 50:1, 100:1, 200:1, 500:1
1 lot = 100,000 units of base currency
Margin Calculation Results
Amount needed to open this position
Currently locked in open positions
Available for new positions
Healthy margin level
Total position size in base currency
Margin Information
What is Margin in Forex?
In forex trading, margin is the good-faith deposit your broker holds to cover potential losses on an open position. It is not a transaction cost or fee — it is collateral that gets released back to your free margin when you close the trade.
The required margin is expressed as a percentage of the full notional value of the trade. For example, at 1% margin (100:1 leverage), opening a standard lot of EUR/USD worth $100,000 requires only $1,000 in margin. That $1,000 is locked as collateral for as long as the position is open.
Understanding margin is essential before trading because it determines how many positions you can open simultaneously and how much price movement your account can absorb before receiving a margin call. Traders who ignore margin mechanics often find themselves stopped out of otherwise good trades during short-term volatility spikes.
Margin vs Leverage
Leverage and margin are inverses of each other. If a broker offers 100:1 leverage, the margin requirement is 1% (1 ÷ 100). If a broker offers 500:1 leverage, the margin requirement drops to 0.2%. Higher leverage means less margin needed per trade — but also means losses accumulate faster relative to your deposited capital.
The relationship is straightforward:
High leverage is a double-edged sword. It amplifies both profits and losses proportionally. Regulators in many jurisdictions cap retail leverage (e.g. 30:1 in the EU under ESMA rules), while offshore brokers may offer 500:1 or higher. South African traders accessing international brokers should understand that higher leverage demands tighter discipline and smaller position sizes to manage risk effectively.
Margin Call vs Stop Out
These two terms are often confused but represent distinct stages of account distress:
Margin Call (typically 100% margin level)
This is a warning. Your equity has fallen so that it only just covers your used margin. Most brokers notify you at this point to deposit funds or close positions. You still have the ability to act — the broker has not yet closed anything automatically.
Stop Out (typically 50% margin level)
This is automatic action. If you ignore the margin call and losses continue, the broker starts closing your positions — usually beginning with the largest losing trade — until your margin level rises back above the stop-out threshold. This can result in locking in significant losses.
The exact levels vary by broker. Always check your broker’s margin call and stop-out documentation before opening your first live trade.
Required Margin by Leverage
The table below shows the required margin for a $10,000 position (0.1 standard lots of a USD-quoted pair) at common leverage levels. This gives you a quick feel for how leverage affects capital requirements.
| Leverage | Margin % | Required Margin ($10,000 position) |
|---|---|---|
| 50:1 | 2.00% | $200.00 |
| 100:1 | 1.00% | $100.00 |
| 200:1 | 0.50% | $50.00 |
| 500:1 | 0.20% | $20.00 |
Based on a $10,000 notional position size. Actual margin may vary slightly based on the currency pair and current exchange rate.
Frequently Asked Questions
What is margin in forex trading?
Margin is the amount of money your broker requires you to deposit in order to open and maintain a leveraged position. It is not a fee — it is collateral. The required margin is typically expressed as a percentage of the total trade value (e.g. 1% margin = 100:1 leverage).
What is the difference between margin and leverage?
Leverage and margin are two sides of the same coin. Leverage is the ratio of your total position size to your deposited margin — 100:1 leverage means you control $100 for every $1 of margin. Margin percentage is simply 1 divided by the leverage ratio: 100:1 leverage requires 1% margin, 500:1 leverage requires 0.2% margin.
What is a margin call?
A margin call occurs when your margin level (equity ÷ used margin × 100) falls to or below 100%. Your broker will notify you to deposit more funds or close positions. If you do not act and the margin level continues to drop, the broker may begin closing your positions automatically at the stop-out level.
What is the stop-out level?
The stop-out level is the margin level percentage at which your broker begins closing your open positions automatically, starting with the least profitable trade. Most retail brokers set the stop-out level at 50%, though this varies. Always check your broker's specific margin call and stop-out levels before trading.
Compare High-Leverage Brokers
If you need higher leverage ratios than regulated brokers in your region allow, several offshore brokers offer 500:1 or above while still maintaining solid execution and fund security. Review your options below: