What is margin in forex?
Margin is the part of your account balance that your broker sets aside as a deposit to keep a leveraged position open. It is not a fee and it is not spent; it is released when you close the trade. What remains available for new trades and for absorbing losses is called free margin.
This forex margin calculator shows how much margin a position requires, based on the instrument, position size, current price, your leverage and your account currency.
The formula
Notional value = Lots × Contract size × Price (in the quote currency)
Required margin = Notional value ÷ Leverage (converted to account currency)
Forex, account currency = base currency:
Required margin = Lots × 100,000 ÷ Leverage
Leverage written as 1:100 means you control $100 of exposure for every $1 of margin. In percentage terms, 1:100 is a 1% margin requirement, 1:30 is about 3.33%, and 1:500 is 0.2%.
Worked example: one trade, three leverage levels
Take 1 standard lot of EURUSD at 1.0850 in a USD account. The notional value is 100,000 × 1.0850 = $108,500.
| Leverage | Margin requirement | Required margin |
|---|---|---|
| 1:30 | 3.33% | $3,616.67 |
| 1:100 | 1% | $1,085.00 |
| 1:500 | 0.2% | $217.00 |
The position, its pip value ($10 per pip) and its risk are the same in all three rows. Only the deposit changes. Higher leverage frees up margin but does not make a trade smaller; a 50 pip loss costs $500 whatever the leverage.
Gold and USD-based pairs
The same logic applies to other instruments, but contract sizes differ.
- 0.5 lot of XAUUSD at 4,000 (100 oz per lot): notional = 0.5 × 100 × 4,000 = $200,000. Margin is $6,666.67 at 1:30, $2,000 at 1:100 and $400 at 1:500, if your broker applies the same leverage to gold. Many brokers set lower leverage on metals than on currency pairs.
- 1 lot of USDJPY in a USD account: the dollar is the base currency, so the notional is simply $100,000. Margin is $3,333.33 at 1:30, $1,000 at 1:100 and $200 at 1:500.
How to use this calculator
- Select the instrument.
- Enter the position size in lots.
- Enter the current price, or use the price filled in.
- Choose your leverage, for example 1:30, 1:100 or 1:500.
- Choose your account currency and read the required margin.
To find out how many lots you should trade before checking margin, use the lot size calculator.
Leverage limits by region and instrument
Maximum leverage depends on where your broker is regulated and what you trade. Retail clients under European and UK rules are typically capped at 1:30 on major forex pairs and lower on gold, indices and crypto. Offshore brokers may offer 1:500 or more. Many brokers also apply lower leverage to large positions, around news events or over weekends. Check your broker's margin requirements for each symbol rather than assuming the account leverage applies to everything.
Margin level, margin call and stop out
Your platform shows a margin level, which is equity divided by used margin, times 100. If open losses push equity down, the margin level falls. Brokers set a margin call level (often 100% or 80%) and a stop-out level (often 50% or lower) at which they start closing positions. The exact levels differ by broker. Keeping used margin small compared with equity gives your trades room to move without forced closures.
Margin vs real exposure
Low required margin can hide large exposure. In the 1:500 example, $217 controls more than $108,000 of euros. To see the true size of your book compared with your account, use the leverage calculator, which measures effective leverage from notional value and equity. To understand what a price move will cost on that exposure, the pip value calculator gives the money value per pip.
Frequently asked questions
How much margin do I need for 1 lot of EURUSD?
At a price of 1.0850 in a USD account, you need $3,616.67 at 1:30, $1,085 at 1:100 and $217 at 1:500.
Does higher leverage increase my risk?
Leverage itself does not change the profit or loss per pip. It lets you open larger positions with the same balance, and that larger size is what raises risk. Size positions from your stop loss, not from available margin.
Why is margin on gold higher than on EURUSD?
A lot of gold at around $4,000 per ounce is $400,000 of notional, compared with roughly $108,500 for a lot of EURUSD. Brokers also often apply lower leverage to metals, which raises the margin further.
Is margin the most I can lose?
No. Losses are not limited to the margin set aside; they come from your whole account equity. Some brokers offer negative balance protection, which stops the account from going below zero, but you can still lose the full balance.
Why does my margin change while the trade is open?
On most instruments margin is based on the current price, so it moves with the market. For pairs quoted outside your account currency, exchange rate changes also affect it.
Closing note
A margin calculator tells you whether a trade fits your account before you place it. Use it alongside a risk-based lot size so that margin is a check, not the thing that decides your position.
Trading leveraged products carries a high risk of loss. Results are estimates; check your broker's contract specifications.