Margin
Margin
Estimate the required margin based on price, size, and leverage.
Notional value
108,500 $
Required margin
3,616.67 $
What the position is worth · what it locks up
This tool works out the margin your broker locks on your account when you open a forex or CFD position. Enter the instrument, the number of lots, the entry price and your leverage · it shows the position's notional value (its real size on the market) and the required margin, converted into your account currency.
Margin is not a fee: it is a security deposit held while the position is open and released in full when you close it. Knowing this amount before opening a trade tells you how much of your capital remains available as free margin, the buffer that absorbs price swings. A position whose margin eats up almost the whole account leaves very little room before a margin call.
The formula behind it
Required margin = notional value ÷ leverage. The notional value equals lots × contract size × entry price: for 1 lot of EURUSD at 1.0850, that is 100,000 × 1.0850 = 108,500 dollars, which means 3,616.67 dollars of margin at 1:30. When the instrument is quoted in a currency other than your account's, the tool converts the amount using an indicative exchange rate.
A worked example · 1 lot of EURUSD at 1:30
You open 1 lot of EURUSD at 1.0850, account in dollars, leverage 1:30. Step 1, the notional value: 1 lot × 100,000 units × 1.0850 = 108,500 $. That is the real size of your position on the market. Step 2, the required margin: 108,500 ÷ 30 = 3,616.67 $. That is what your broker locks while the position is open, and releases when it closes. Step 3, run the same numbers at 1:500: 108,500 ÷ 500 = 217 $. The margin was divided by more than sixteen · the position is still worth 108,500 $, and every pip weighs exactly as much.
Margin for 1 lot of EURUSD at 1.0850, by leverage
Same position as the example (108,500 $ notional) · only the leverage changes, the formula margin = notional ÷ leverage does the rest.
| Leverage | Locked margin | Share of the position |
|---|---|---|
| 1:10 | 10,850 $ | 10% |
| 1:20 | 5,425 $ | 5% |
| 1:30 | 3,616.67 $ | 3.33% |
| 1:50 | 2,170 $ | 2% |
| 1:100 | 1,085 $ | 1% |
| 1:200 | 542.50 $ | 0.5% |
| 1:500 | 217 $ | 0.2% |
What the number does not tell you
Margin is not your risk. You can lock up 217 $ and lose far more, because losses are computed on the 108,500 $ position, never on the margin · your actual risk depends on your stop and the pip value. The calculation also knows nothing about your broker's rules: some raise margin requirements on certain instruments, before news or over the weekend, and each sets its own margin-call and stop-out levels. Finally, conversion into your account currency uses indicative rates updated by hand: the order of magnitude is reliable, the exact figure belongs to your broker.
The classic mistake
Confusing margin with risk. A small margin feels like a small position, and it is exactly the opposite: the higher the leverage, the less margin you see, and the easier it becomes to oversize without feeling it. At 1:500, 217 $ is enough to carry 108,500 $ of market exposure · the account looks barely touched, while every price move applies to the full notional. Margin measures what the broker locks, never what you can lose: that second number is set by your stop and your position size.
Frequently asked questions
Is margin a cost I lose?
No. Margin is a security deposit your broker sets aside while the position is open and returns in full when you close it. Your gain or loss comes from the price move applied to the notional value, not from the margin amount.
What does leverage actually change?
It divides the margin you need to set aside, nothing else. At 1:30, a 108,500 dollar position requires 3,616.67 dollars of margin; at 1:500, the same position needs only 217. The exposure stays identical in both cases: gains and losses are always calculated on the notional value. In the EU, retail leverage is capped at 1:30 on major currency pairs.
Why does the result differ from my broker's?
For instruments quoted in a currency other than yours, the tool uses indicative conversion rates rather than live prices. Each broker also applies its own contract specifications, and sometimes higher margin requirements depending on the instrument or the time of day. The order of magnitude is reliable · the exact figure is the one your broker shows.
What happens when my free margin runs out?
When floating losses eat into your free margin, your broker first issues a margin call: an alert asking you to close positions or add funds. If the margin level keeps falling below its stop-out threshold, the broker closes your positions itself, usually starting with the most losing one. Every broker publishes both thresholds in its terms · they differ from one firm to the next.
Why is leverage capped in Europe?
Since 2018, the European regulator ESMA has capped retail leverage: 1:30 on major currency pairs, 1:20 on other pairs, gold and major indices, 1:10 on other commodities, 1:5 on stocks, 1:2 on cryptocurrencies. Lay out the arithmetic: at 1:30, margin represents at least 3.33% of the position · at 1:500, 0.2%. The lower the cap, the more the size an account can carry is limited relative to the deposit.
See also
Position size
Work out how many lots to open from your account size, risk percentage and stop loss distance in pips. Free, no sign-up, runs entirely in your browser.
Profit
Work out the profit or loss of a forex, index or metals trade from the entry price, the exit price and the lot size. Free in-browser calculator, no sign-up.
Pip value
Work out what one pip is worth for any currency pair, based on your lot size and account currency. Free, instant, and everything runs in your browser.