Benjamin M971 Morris

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What is margin in forex and how to calculate it?

Margin in forex is the amount of money required in your account to open and maintain a leveraged position. It acts as collateral that ensures you can cover potential losses. For example, with 1:100 leverage, to open a $100,000 position you need only $1,000 in margin. The formula to calculate margin is: Required Margin = Trade Size ÷ Leverage. Example: If you trade 1 standard lot of EUR/USD (100,000 units) with 1:50 leverage, margin = 100,000 ÷ 50 = 2,000 units of base currency. Margin levels matter: if equity falls below margin requirements, the broker may issue a margin call or automatically close positions. Managing margin carefully helps avoid forced liquidation and protects capital.