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Margin Calculator

Leverage is a double edged sword that allows you to control large positions with a small amount of capital. To use it safely, you must understand exactly how much margin your broker requires for each trade. This tool calculates your required deposit and total market exposure instantly so you can stay in control of your account.

1. Account & Trade Setup

2. Margin Requirements

Required Margin$0
Total Market Exposure$0
Margin is the "good faith deposit" required by your broker to maintain a leveraged position. It is not a cost, but it does limit how many trades you can have open at once.

What is Margin in Trading?

Margin is essentially a security deposit that you provide to your broker to keep a leveraged position open. It is not a fee or a transaction cost. Instead, it is a portion of your account balance that is "locked" while your trade is active. Once you close the trade, the margin is released back to your usable balance.

The amount of margin you need depends on the leverage offered by your broker. For example, if you have 1 to 100 leverage, you only need to provide 1% of the total position value as margin. While this allows for higher potential returns, it also increases the risk of a "margin call" if the market moves against you and your usable capital runs low.

Conceptual representation of financial leverage and market exposure

How to Calculate Required Margin

The formula for calculating margin is based on the total value of the contract you are trading.

The Margin Formula

Required Margin = Total Position Value / Leverage Ratio

Example: A $100,000 position with 1:100 leverage requires $1,000 in margin.

Position value varies depending on the asset. For Forex, it is the size of the base currency units. For Gold, it is the current price multiplied by the number of ounces. For Bitcoin, it is the current price multiplied by the number of units. This calculator handles these details to give you a precise number for any setup.

The Risks of High Leverage

Overexposure

Low margin requirements can tempt traders into opening positions that are too large for their account. Always focus on your risk percentage, not just the margin required.

Margin Calls

If your account equity drops below a certain level, the broker may close your trades automatically. Keeping a healthy "free margin" buffer is essential for safety.

Safe vault representing financial security and collateral

Frequently Asked Questions

What is the difference between margin and equity?

Margin is the amount locked by the broker, while equity is your total balance including your current open profits or losses. Free margin is what you have left to open new trades.

Does leverage increase the cost of a trade?

No. Leverage only changes the amount of margin you need to provide. Costs like spreads and commissions are usually based on the position size, regardless of your leverage.

Why is gold margin higher than forex?

Many brokers require more margin for volatile assets like Gold or Bitcoin to protect themselves from sudden market gaps. This tool helps you see those requirements before you enter.