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Calculate the required margin for any trade based on lot size and leverage
Enter the current price from your broker
Required Margin
$1,080.00
EUR/USD · 1 lot(s) · 1:100
Notional Value
$108,000.00
Margin %
1.00%
Margin is the collateral your broker requires to open a leveraged position. For example, 1 standard lot of EUR/USD = 100,000 EUR. At 1:100 leverage, the required margin is 100,000 ÷ 100 = 1,000 EUR (about $1,080 at current rates). Higher leverage means less margin, but also higher risk.
Why might this differ from your broker?
For exact margin, check your broker's symbol specification in MT4/MT5 (right-click a symbol → Specification → Margin rates).
Margin is collateral. Your broker holds a portion of your account while you have a leveraged position open. You put up a fraction of the trade's full value, and the broker covers the rest. When you close the trade, the margin goes back into your available balance (adjusted by whatever the trade gained or lost).
It's not a fee. Not a transaction cost. Your broker doesn't keep it.
We build trading tools at FXTool and talk to retail traders every day. The number-one misconception we hear: "margin is money the broker charges me." No. It's your own money, temporarily locked. Open a 1-lot EUR/USD position at 1:100 leverage and you're controlling 100,000 EUR (about $108,000 at current rates). Your broker locks roughly $1,080 as margin. That money is still yours -- it's just unavailable for other trades until this one closes.
Why does this matter? According to ESMA's regulatory report on CFDs, the majority of retail traders who get margin-called didn't understand margin mechanics beforehand. The CFTC also warns that misunderstanding margin is one of the top reasons retail forex accounts fail. Knowing what margin actually is already puts you ahead.
The formula is straightforward:
Where:
You want to buy 1 standard lot of EUR/USD at 1:100 leverage. EUR/USD is at 1.0850.
$1,085 of your account is locked as margin while this trade is open. Everything else is your free margin -- available for new trades or as a buffer against drawdown.
One thing people miss: the exchange rate matters. If EUR/USD moves to 1.1000 tomorrow, the same trade would require $1,100 in margin. Brokers recalculate on every tick. The calculator at the top of this page uses daily rates, so your live platform number may differ slightly. For pip-level precision, pair this with our pip calculator, and to see how those pips translate to actual profit or loss, try the profit calculator.
Before we go deeper, let's get the terminology straight. Your MT4/MT5 platform shows several margin-related numbers. Here's what each one actually means:
Required Margin (Used Margin): The total amount locked as collateral across all open positions. Two trades each requiring $500? Your used margin is $1,000.
Free Margin: Your equity minus used margin. This is the money available to open new trades or absorb losses. When it hits zero, you can't open anything new.
Margin Level: Equity divided by used margin, expressed as a percentage. This is the single number your broker watches to decide if you're in trouble.
Equity: Account balance plus or minus the unrealized P&L of open trades. Balance is $10,000, open trades are down $500, equity is $9,500.
The number that matters most is margin level. Above 500%: comfortable. Between 200-500%: pay attention. Below 100%: your broker starts getting nervous. Below the stop-out threshold: they close your trades without asking. We've seen traders with 1200% margin level panic because one trade is red -- and traders at 95% margin level add more positions because "it'll bounce back." Don't be the second one. Our risk management guide covers how to monitor these numbers in practice.
Higher leverage = lower margin requirement. Lower leverage = more capital locked per trade. They're inversely linked. Here's the relationship for 1 standard lot of EUR/USD (100,000 EUR, ~$108,000 notional at current rates):
| Leverage | Margin Required (%) | Margin for 1 Lot EUR/USD | Common In |
|---|---|---|---|
| 1:30 | 3.33% | ~$3,600 | EU brokers (ESMA rules) |
| 1:50 | 2.00% | ~$2,160 | US brokers (CFTC regulated) |
| 1:100 | 1.00% | ~$1,080 | Most international brokers |
| 1:200 | 0.50% | ~$540 | Offshore / Australian brokers |
| 1:500 | 0.20% | ~$216 | High-leverage offshore brokers |
Notice we added the 1:30 row. If you're trading with a European broker, that's your cap for major pairs under ESMA rules since 2018. US brokers max out at 1:50. If your broker offers 1:500 or 1:1000, they're almost certainly offshore. That's not automatically bad, but know what regulatory protection you're giving up.
Here's the trap. 1:500 leverage means you only need $200 to open a standard lot. So a trader opens five standard lots on a $2,000 account because "the broker lets me." That's $1,000 in margin on a $2,000 account -- 50% margin usage. One bad candle and you're done. The leverage isn't the problem. The sizing decision is. Use our position size calculator to figure out what you should actually be trading, and the drawdown calculator to see how fast overleveraged accounts blow up.
Lot size scales margin linearly. Double the lots, double the margin. Here's the math at 1:100 leverage on EUR/USD:
| Lot Type | Units | Notional Value | Margin at 1:100 |
|---|---|---|---|
| Standard (1.00) | 100,000 EUR | ~$108,000 | ~$1,080 |
| Mini (0.10) | 10,000 EUR | ~$10,800 | ~$108 |
| Micro (0.01) | 1,000 EUR | ~$1,080 | ~$10.80 |
A $5,000 account trading micro lots uses about $10 in margin per position. That leaves $4,990 as free margin. Plenty of room. The same account trading standard lots burns $1,000 per position -- 20% of the account gone immediately.
Our recommendation: keep total margin usage below 10-15% of your account across all positions. On a $5,000 account, that means no more than $500-$750 locked in margin at any time. Sounds conservative? It is. We've run Monte Carlo simulations across all the Expert Advisors we sell. Accounts that stay under 10% margin usage survive drawdown months. The ones that routinely hit 20%+ eventually don't. We track this -- it's not a guess.
A margin call happens when your margin level drops to the broker's threshold -- typically 100%. Your equity has fallen to equal (or drop below) the margin required for your open trades.
At 100% margin level, every dollar in your account is serving as margin. Zero buffer. The broker sends a warning: add funds, close positions, or the system does it for you.
You have a $5,000 account with $1,000 in used margin. Margin level: 500%. The market moves against you by $4,000 -- equity drops to $1,000. Margin level is now 100%. That's your margin call.
$4,000 sounds like a lot. It's 400 pips on a 1-lot EUR/USD position. In quiet markets, that takes weeks. During events like the 2015 Swiss franc flash crash, it happened in seconds. The BIS Quarterly Review documented how some brokers couldn't execute stop-outs fast enough during that event, leaving traders with negative balances.
How to avoid it:
The best defense: size your positions correctly from the start. The position size calculator tells you the right lot size based on how much you can afford to lose -- not how much margin you have available. Those are two very different questions.
Stop-out is what happens after the margin call if you don't act. Your broker automatically closes your positions -- starting with the biggest loser -- until your margin level recovers above the stop-out threshold.
Stop-out levels vary by broker and regulation:
| Broker Type | Typical Margin Call | Typical Stop-Out |
|---|---|---|
| EU-regulated (ESMA) | 100% | 50% |
| US-regulated (CFTC) | 100% | 50% |
| International / offshore | 80-100% | 20-30% |
A lower stop-out level sounds better -- more room before forced closure. But flip it around: at 20% stop-out, your account can lose 80% of its margin before the broker steps in. Recovering from that kind of drawdown requires a 400% return. To see the math on drawdown recovery, check our drawdown calculator. Spoiler: it's brutal.
Our take: don't plan around the stop-out level. If the broker is closing your trades for you, the real problem happened much earlier. Your stop losses should be doing this job long before the broker's risk engine kicks in.
Not everything trades at the same contract size. Margin requirements vary significantly across asset classes. Here's what you'll typically see at 1:100 leverage:
| Instrument | Contract Size (1 lot) | Approx. Notional | Margin at 1:100 |
|---|---|---|---|
| EUR/USD | 100,000 EUR | ~$108,500 | ~$1,085 |
| GBP/USD | 100,000 GBP | ~$127,000 | ~$1,270 |
| USD/JPY | 100,000 USD | $100,000 | $1,000 |
| XAU/USD (Gold) | 100 oz | ~$240,000 | ~$2,400 |
| US30 (Dow Jones) | 1 contract | ~$40,000 | ~$400 |
Gold catches a lot of traders off guard. One standard lot of XAU/USD at current prices controls around $240,000 in value. At 1:100 leverage that's $2,400 in margin -- more than double a standard forex lot. We see this mistake often: a trader comfortable with 1-lot EUR/USD opens 1-lot gold without checking the margin, then wonders why their free margin dropped so fast.
Always use the calculator at the top of this page before opening a trade on an instrument you haven't traded before. And if you're unsure what a pip is worth on any of these, the pip calculator has you covered.
We run every EA we sell on live accounts at FXTool. Across 50+ Expert Advisors and over 12,000 tracked trades, here's what the data actually shows about margin management:
1. The 10% ceiling is real. In our backtesting and live monitoring, accounts that keep margin usage under 10% have a significantly higher survival rate over 12-month periods. Once you cross 20% usage regularly, the probability of a margin call in any given quarter rises sharply. We don't have a published study to point to -- this is from our own data.
2. Correlated pairs are hidden leverage. Long EUR/USD and long GBP/USD at the same time? Your margin shows two separate entries. Your actual risk is one bet: short USD. If the dollar strengthens, both trades lose simultaneously. We build correlation checks into several of our Expert Advisors for exactly this reason.
3. News events change the rules mid-game. Brokers can and do raise margin requirements before NFP, rate decisions, or elections. Your 1:500 leverage might temporarily drop to 1:50. If you're already near your margin limit, this alone triggers a margin call -- and you didn't even place a new trade. Some of our EAs include news filters because of this.
4. Free margin is a survival buffer, not a budget. $5,000 in free margin doesn't mean "I can open $5,000 in new positions." That free margin is what keeps your existing trades alive during drawdowns. Think of it as an emergency fund. If you spend your emergency fund, the next emergency wipes you out.
5. Margin is one piece of the puzzle. Margin tells you how much capital is locked. It doesn't tell you how much you can afford to lose (use the position size calculator), what each pip is worth (use the pip calculator), whether your risk-reward makes mathematical sense (use the risk-reward calculator), or how long it takes to recover from a drawdown (use the drawdown calculator). Used together, these tools give you a complete risk picture. Individually, each one only shows a slice.
Margin is collateral your broker requires to hold a leveraged position open. It's your own money temporarily locked -- not a fee. When you close the trade, it goes back to your available balance.
Multiply trade size by contract size and exchange rate, then divide by leverage. For 1 standard lot of EUR/USD at 1.0850 with 1:100 leverage: (1 x 100,000 x 1.0850) / 100 = $1,085. The calculator at the top of this page does this with live rates.
Used margin is the total collateral locked for open trades. Free margin is your equity minus used margin -- the amount available to open new positions or absorb floating losses.
A margin call triggers when your margin level (equity / used margin) drops to the broker's threshold, typically 100%. The broker warns you to deposit funds or close positions. Exact thresholds vary: most EU and US brokers use 100%.
The margin level at which your broker automatically closes your losing positions. EU and US brokers typically stop out at 50%. Offshore brokers often use 20-30%, which sounds lenient but means your account can lose more before intervention.
Not by itself. Higher leverage means less margin per trade, which lets you open larger positions. The risk depends on your position sizing, not the leverage ratio. A trader at 1:500 with disciplined sizing carries less risk than a trader at 1:50 who goes all-in.
Keep total margin usage below 10-15% of your account. In our experience, accounts exceeding 20% usage regularly face margin calls within 6 months. Leave the rest as a buffer for drawdowns and unexpected volatility.
Yes. Brokers raise margin requirements before major economic releases, during extreme volatility, and for specific instruments. Your 1:100 leverage can temporarily become 1:25 without warning. Always maintain extra free margin as a buffer.
Yes. Gold (XAU/USD) has a contract size of 100 oz, not 100,000 units. At current prices, 1 lot of gold requires roughly double the margin of 1 lot of EUR/USD. Always check the specific margin requirement before trading an unfamiliar instrument.