Margin in forex is the equity locked as collateral against an open position, equal to position notional divided by leverage. At 1:100 leverage, $1,000 of margin controls a $100,000 position. Margin is not the same as risk , risk is determined by stop loss distance, not by margin required.
The margin calculator below tells you exactly how much equity gets locked the moment you open a position. Pick the instrument, the lot size, the leverage your broker offers. The number that comes back is the margin requirement. Anything above that in your account is free margin available to absorb adverse moves.
Margin Calculator
Margin is not the same as risk, and that confusion costs accounts
Margin and risk are two different numbers and conflating them is one of the most common mistakes new traders make. Margin is the equity the broker locks to open the trade. Risk is the maximum dollar amount you stand to lose if the price hits your stop. A 1 lot EUR/USD position at 1:100 leverage locks $1,100 of margin but, with a 30-pip stop, the dollar risk is only $300. The other $800 of margin is collateral that releases when the trade closes, win or lose.
The reason this matters is account survival. A trader looking only at margin will size positions based on what their account allows them to open, not what their strategy says is risk-appropriate. The result is over-leveraged positions where a normal adverse move chews through free margin before the stop is hit, triggering a margin call before the trade gets the chance to work.
How leverage actually changes the picture
Leverage changes margin requirements, not P&L. The same 1 lot EUR/USD position has the same dollar P&L per pip at 1:30 leverage as at 1:500 leverage. The only difference is how much margin the broker locks: at 1:30 it locks $3,667, at 1:500 it locks $220. Higher leverage frees up more equity for other positions or for buffer against adverse moves, it does not change the math of the underlying trade.
The institutional approach is to choose leverage based on portfolio sizing flexibility, not on per-trade aggressiveness. Higher leverage allows the desk to hold a larger book of correlated positions without margin constraints, lower leverage forces tighter portfolio construction. Neither is good or bad in isolation, both are tools.
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Frequently asked questions
What is margin in forex?
Margin is the collateral your broker requires to open a leveraged position. At 1:100 leverage, $1,000 of margin controls a $100,000 position. The margin is not a fee, it is locked equity that releases when you close the trade.
What is the difference between used margin and free margin?
Used margin is the equity locked against currently open positions. Free margin is the rest of your account balance, available to open new positions or absorb adverse moves on existing ones. When free margin reaches zero, the broker can margin-call or stop-out your positions.
What leverage do prop firms typically offer?
Most prop firms offer 1:30 to 1:100 leverage on forex, lower on indices (1:20) and lower still on crypto (1:5). E8 Markets offers up to 1:100. FTMO 1:30. Apex Trader Funding 1:30 on futures. The calculator handles any custom leverage value.
Does higher leverage mean higher risk?
Higher leverage means lower margin required, which means more position size is possible for the same equity. Risk per trade is still controlled by position size times stop distance, not by the leverage number on the account. Leverage just sets the ceiling on how much risk you can take, it does not force you to take it.
What is margin call versus stop-out level?
Margin call is the warning level where the broker notifies you that free margin is low (typically when equity falls to 100% of used margin). Stop-out is the level where the broker forcibly closes positions to protect their exposure (typically at 50% or 20% of used margin). The calculator does not predict either, it just shows the margin required at open.
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