Margin calculator: how much margin a forex trade needs

Written by the Tactfolio research teamPublished 4 min read

Margin is the money your broker holds while a leveraged trade is open. It is a deposit, not a fee. This margin calculator shows how much deposit a forex trade needs: the full value of the trade divided by your leverage.

  • Margin needed = full value of the trade ÷ leverage.
  • At 30:1, a trade worth $110,000 needs about $3,667 of margin.
  • US rules ask for at least 2% margin on major currency pairs and 5% on other pairs. That is at most 50:1 and 20:1 leverage.
  • In the EU, retail traders get at most 30:1 on major pairs.
  • Margin is not the most you can lose. A loss can be much bigger than the margin.

Looking for profit margin on a sale? That is a different number. This page is about margin for trading.

Result

Margin needed
$3,666.67
Full value of the trade
$110,000.00
Margin as a share of the trade
3.33%

How to use the margin calculator#

Pick the currency pair and your account currency. Type your trade size in lots, the price of the pair, and your broker’s leverage. The calculator shows the margin needed, the full value of the trade, and the margin as a share of that value.

The prices start at round example numbers. They are not live prices, so type the price your broker shows you.

How do you calculate margin?#

Margin is the full value of the trade, in your account currency, divided by the leverage.

full value = units × price × rate to your account currency
margin = full value ÷ leverage
margin as a share of the trade = 100% ÷ leverage

Units is your trade size in lots times 100,000. The rate to your account currency works the same way as in the pip calculator. It is 1 when your account currency is the second currency in the pair.

Each leverage level asks for a fixed share of the trade as margin.

LeverageMargin as a share of the tradeMargin for a $100,000 trade
2:150%$50,000
10:110%$10,000
20:15%$5,000
30:13.33%$3,333
50:12%$2,000

A worked example#

Say you buy 1 standard lot of EUR/USD at 1.1000. Your account is in US dollars, and your broker gives you 30:1 leverage.

  1. The trade is 1 × 100,000 = 100,000 euros.
  2. Its full value is 100,000 × 1.1000 = $110,000.
  3. The margin is $110,000 ÷ 30 = $3,666.67.

With 50:1 leverage, the same trade needs $2,200 of margin. But the risk is the same. Each pip is still worth $10, so a 100 pip move still gains or loses $1,000.

What happens when your margin runs low?#

When losses eat into your account, your broker can close your trades. Your equity is your cash plus or minus the profit or loss on open trades. If equity falls too close to the margin needed, the broker may ask for more money. That request is a margin call. If equity keeps falling, the broker closes your trades for you.

EU rules make brokers close a retail client’s trades once equity falls to half of the margin needed. Each broker sets its own level, so check yours before you trade.

Leverage makes losses bigger as well as gains. You can lose more than you put in.

Is stock margin the same?#

Stock margin works on a different set of rules. With a margin account, your broker lends you cash to buy stocks, and your stocks back the loan. US rules say you must keep your own money worth at least 25% of the stocks you hold on margin. Many brokers ask for more.

Common mistakes with margin#

  • Thinking margin is the risk. The margin is a deposit. Your loss depends on the full value of the trade, not on the margin.
  • Using all of your money as margin. Then any small loss can trigger a margin call.
  • Forgetting the margin changes with price. When the price of a pair rises, the full value of the trade rises, and so does the margin.
  • Mixing up maximum and sensible leverage. The leverage your broker offers is a limit, not a goal.

Try it on Tactfolio#

Tactfolio does not trade forex, and its stock and ETF strategies never borrow on margin. This calculator is a free tool for learning. They can hold leveraged ETFs, which borrow inside the fund instead. You can test a rule with one in the Tactfolio strategy builder and see its worst drop on past prices. To see how a price move hits your account, try the leverage calculator. To see what a trade earns, try the forex profit calculator. Every tool is on the free trading calculators page.

Common questions#

What is a margin calculator?#

A margin calculator works out the deposit a broker needs to open a leveraged trade. You give it the pair, the trade size, the price and your leverage. It divides the full value of the trade by the leverage.

How much margin do I need for 1 lot?#

One standard lot is 100,000 units. On EUR/USD at 1.1000, its full value is $110,000. At 30:1 leverage you need about $3,667. At 50:1 you need $2,200.

What is the difference between margin and leverage?#

Leverage is how many times bigger your trade is than your deposit. Margin is the deposit itself. Margin as a share of the trade is 100% divided by the leverage, so 50:1 leverage means 2% margin.

What is a margin call?#

A margin call is your broker asking you to add money because losses have eaten into your account. If you don’t add money and losses grow, the broker closes some or all of your trades.

Can I lose more than my margin?#

Yes. Your profit or loss comes from the full value of the trade, not the margin. A fast move can lose more than your margin, and with some brokers more than your whole account.

Sources

Understand the numbers