Margin
Margin is the deposit a broker requires you to maintain as collateral to open and hold a leveraged position. It is not a fee — it is the portion of your account equity set aside to cover potential losses.
Required margin is calculated as: (Lot size × Contract size × Price) ÷ Leverage. For example, opening 1 standard lot of EUR/USD at 1.0850 with 1:100 leverage requires margin of (100,000 × 1.0850) ÷ 100 = $1,085.
Your account will show "used margin" (the total locked up across open positions) and "free margin" (equity minus used margin — the amount available to open new trades or absorb losses). If your free margin falls to zero, you have exhausted your buffer.
A margin call occurs when losses reduce your account equity below the broker's minimum margin requirement (often 50–100% of used margin). The broker will alert you and may automatically close your positions at the current market price if you do not add funds.
Margin close-out rules vary by broker and regulator. Under ESMA rules in the EU and UK, retail CFD accounts are closed out at 50% of the required margin. Understanding your broker's specific rules before trading with leverage is essential.
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