How Forex Margin Requirements Work
Margin is the collateral your broker locks up to open a leveraged position — not a fee, but funds set aside. Here's exactly how it's calculated.
Margin = (units × exchange rate) ÷ leverage. Example: 1 standard lot EUR/USD at 1.0850 with 1:100 leverage needs $1,085 margin.
The formula
Position value = units × exchange rate (the full notional size of the trade). Required margin = position value ÷ leverage. Higher leverage means less margin locked up per trade — but the position size, and therefore the risk, stays the same.
What happens if equity falls below margin?
If your account equity drops too close to (or below) required margin as a trade moves against you, your broker issues a margin call or automatically closes positions ('stop out') to prevent a negative balance. Exact thresholds vary by broker — check your account terms.
Try Free Web Tools Mentioned in This Guide
Margin Calculator
Calculate the exact margin required to open a forex position at your broker's leverage.
Leverage Calculator
Solve for leverage, margin, or position value — enter any two, get the third.
Position Size Calculator
Size your trade so a fixed % of your account is at risk — the #1 way traders blow accounts.
Frequently Asked Questions
Does higher leverage mean higher risk?↓
Leverage itself doesn't increase risk on a given position size — it changes how much margin that position ties up. Risk comes from position size relative to your account, which is why position sizing (not leverage alone) is the real risk control.
Is margin the same as a trading fee?↓
No — margin is refundable collateral, returned when you close the position (adjusted for any profit or loss). It's not a cost like spread or commission.