TSB
Margin Calculator
Calculate required margin for any trade based on position size, leverage, and currency pair. Avoid margin calls.
USD
lots
Margin Requirements
Required Margin
$1,085
locked as collateral
Position Value
$108,500
total exposure
Free Margin
$8,915
available
Margin Used
10.9%
Safe (0-30%)
Caution (30-70%)
Danger (70%+)
Conservative margin usage — plenty of room for additional trades or drawdown
What is Margin in Trading?
Margin is the amount of money required to open and maintain a leveraged trading position. Think of it as a security deposit — it's not a fee, but funds set aside as collateral while your trade is open.
Required Margin = (Lot Size × 100,000 × Price) ÷ Leverage
For 1 lot EUR/USD at 1.0850 with 1:100 leverage = $1,085 margin
Example Calculation
Position: 1 lot EUR/USD @ 1.0850
Leverage: 1:100
Contract size: 100,000 units
Position Value = 1 × 100,000 × 1.0850 = $108,500
Required Margin = $108,500 ÷ 100 = $1,085
Leverage: 1:100
Contract size: 100,000 units
Position Value = 1 × 100,000 × 1.0850 = $108,500
Required Margin = $108,500 ÷ 100 = $1,085
Leverage vs Margin
Leverage and margin are two sides of the same coin:
- Leverage — The ratio that multiplies your buying power (e.g., 1:100 means $1 controls $100)
- Margin — The actual dollar amount required as collateral
- Margin % — The inverse of leverage (1:100 leverage = 1% margin requirement)
| Leverage | Margin % | Margin for 1 Lot EUR/USD |
|---|---|---|
| 1:500 | 0.2% | $217 |
| 1:200 | 0.5% | $543 |
| 1:100 | 1% | $1,085 |
| 1:50 | 2% | $2,170 |
| 1:30 | 3.33% | $3,617 |
Understanding Margin Levels
Margin Level Formula
Margin Level = (Equity ÷ Used Margin) × 100%. This percentage tells you how healthy your account is relative to open positions.
Key Margin Thresholds
- Above 200% — Healthy account with room to add positions
- 100-200% — Caution zone, monitor closely
- 100% (Margin Call) — Broker may require deposit or position closure
- 50% or below (Stop Out) — Positions automatically liquidated
How to Avoid Margin Calls
- Use proper position sizing — Never risk more than 1-2% per trade
- Keep margin usage low — Aim for under 30% of available margin
- Set stop losses — Limit potential drawdown before it threatens margin
- Monitor open positions — Especially during high-volatility events
- Maintain cash buffer — Keep extra funds for unexpected moves
Frequently Asked Questions
What is margin in forex trading?
Margin is the amount of money required to open and maintain a leveraged position. It's not a fee or cost — it's a portion of your account equity set aside as collateral. For example, with 100:1 leverage, you need $1,000 margin to control $100,000 worth of currency.
How do you calculate margin requirement?
Required Margin = (Lot Size × Contract Size × Price) ÷ Leverage. For example, 1 lot EUR/USD at 1.0850 with 100:1 leverage: (1 × 100,000 × 1.0850) ÷ 100 = $1,085 margin required.
What is the difference between margin and leverage?
Leverage is the ratio of position size to margin required (e.g., 100:1 means you control $100 for every $1 of margin). Margin is the actual dollar amount held as collateral. They're inversely related: higher leverage = lower margin requirement.
What happens when you get a margin call?
A margin call occurs when your account equity falls below the required margin level (usually 100% or lower). Your broker may require you to deposit more funds or close positions. If margin level drops further (often to 50%), positions may be automatically liquidated.
What is a good margin level to maintain?
Most traders aim to keep margin level above 200-500% to have a safety buffer. Below 100% triggers margin call at most brokers. Professional traders often use only 2-5% of available margin per trade to maintain flexibility and manage risk.
Track Your Margin Usage Over Time
Understanding margin is step one. TSB Pro tracks your historical margin usage and alerts you when you're overexposed.
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