Margin
Margin is the part of equity the broker locks as collateral while a position is open. It is the notional value divided by leverage, and it is not a cost: it comes back when the position closes. Run this calculation now: margin and leverage calculator
Required, used, free and level
Required margin is one position's; used margin is the sum across open positions; free margin is equity minus used margin — what can still be locked by new orders or absorbed by floating losses. Margin level is equity ÷ used margin, as a percentage.
When the level drops to the margin call threshold, the broker warns; at the stop-out threshold, it force-closes positions, starting with the biggest loser. Both thresholds are in the broker's agreement and vary widely.
Margin is not risk
A 1-lot EURUSD position ties up 1,100 dollars at 1:100 and 3,667 at 1:30, but loses the same 10 dollars per pip in both cases. What margin measures is how much capital becomes unavailable, not how much can be lost — that is the stop.
What margin does is set a second, silent limit: the account can be far from the stop and still be liquidated on margin level, if too many positions are open at the same time.
FAQ
Is margin charged as a fee?
No. It is a temporary lock on your own equity, released when the position closes. The position's costs are spread, commission and swap.