Margin is the deposit your broker sets aside when you open a leveraged position. This calculator shows how much margin a forex trade will tie up, what the full position is worth in your account currency and where your margin level starts. Enter the pair’s current price when asked, because margin depends on the size of the position in money terms.
How margin is calculated
Required margin is the position value divided by the leverage. One standard lot of EUR/USD is 100,000 euros. With EUR/USD at 1.1000 that position is worth $110,000, and at 1:30 leverage the broker holds $3,666.67 as margin.
When the base currency of the pair is your account currency, the price drops out of the calculation. One lot of USD/JPY in a dollar account is a $100,000 position wherever the yen trades, so it needs $3,333.33 at 1:30.
Margin level is your account equity divided by the margin in use, shown as a percentage. It starts high and falls as a position moves against you. When it reaches the broker’s stop-out level, positions start being closed automatically, usually beginning with the one showing the largest loss.
Leverage limits depend on where your broker is regulated
Retail clients of brokers regulated in the European Union are limited to 30:1 on major currency pairs and 20:1 on other pairs, under measures introduced by ESMA in 2018. The UK applies the same limits. In the United States, retail forex leverage is capped at 50:1 on major pairs and 20:1 on the rest. Offshore brokers often advertise 1:500 or more, which is one reason regulators warn about them.
Professional clients can sometimes get higher leverage, but they give up some protections in exchange, including negative balance protection in the EU and UK.
Leverage changes your margin, not your risk per pip
This is the point people miss most often. Going from 1:30 to 1:100 on the same 1-lot EUR/USD trade cuts the margin from $3,666.67 to $1,100. It does nothing to the pip value, which stays at $10. A 50-pip move against you still costs $500.
What higher leverage does is let you open a much bigger position with the same money, and that is where accounts get into trouble. Decide the position size from your stop-loss and the amount you are willing to lose, using the position size calculator. Then use this tool to check the trade fits comfortably inside your available margin.
A few things the calculator leaves out
Some brokers charge higher margin on certain pairs, around weekends or ahead of major events, and some use tiered margin that rises with position size. Exotic pairs and CFDs on other assets have their own requirements. The figures here are the basic calculation; your broker’s platform shows the margin it will actually charge.
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