Margin calculator
This margin calculator shows the deposit a broker holds while a leveraged position is open. Margin is not a fee: it is part of your own balance set aside as collateral, and it is returned when the position closes, minus any loss.
The margin calculator formula
Required margin = position value ÷ leverage
When the dollar is the base currency, as in USD/JPY, each unit is worth exactly $1. When the dollar is the quote currency, as in EUR/USD or gold, the value is the price. For cross pairs the calculator asks for the base currency's dollar rate.
Worked examples
All prices are illustrative; leverage figures are the UK and EU retail caps.
- EUR/USD at 1.08, 1 lot, 30:1: 100,000 × 1.08 = $108,000; margin $108,000 ÷ 30 = $3,600.
- USD/JPY, 2 lots, 30:1: position value $200,000; margin $6,666.67.
- Gold at $2,300, 0.5 lots, 20:1: 50 oz × $2,300 = $115,000; margin $5,750.
Reading the result: margin level
Brokers track your margin level: equity (balance plus or minus open profit and loss) divided by the margin in use, as a percentage. If you hold the USD/JPY position above with equity of $9,000, the margin level is $9,000 ÷ $6,666.67 = 135%. UK and EU rules require brokers to begin closing a retail client's positions once the margin level falls to 50%, which here would happen if losses reduced equity to about $3,333.33.
Two points are easy to miss. First, lower margin does not mean lower risk: the profit or loss depends on the full position value, not the deposit. Second, the leverage your broker allows is a ceiling, not a target. Using a fraction of it leaves room for normal price swings. Size positions from risk with the lot size calculator, and read about leverage caps in our forex guide.