Margin

Margin is the collateral your broker requires you to hold against an open leveraged position, expressed either as a cash amount or as a percentage of position size (the inverse of leverage — 1% margin corresponds to 100:1 leverage). Your account tracks several related figures: used margin (locked by open trades), free margin (what remains available to open more), and the margin level (equity divided by used margin, shown as a percentage). As the market moves against you, equity falls, free margin shrinks, and the margin level drops toward the danger zone where margin calls and stop-outs occur. Understanding margin is essential because it controls both how much you can trade and how close you are to a forced liquidation.

In plain English — Margin is the portion of your own money the broker sets aside as a good-faith deposit when you open a leveraged trade. It is not a fee — it is collateral that is held while the position is open and released when you close it. The required margin is determined by your leverage and position size: higher leverage means less margin needed for the same trade. Confusingly small margin requirements are exactly why leverage feels powerful and why it is so easy to take on more risk than you realise.

To open one standard lot of EUR/USD (about $100,000) at 100:1 leverage, you must post about $1,000 in margin. That $1,000 is locked while the trade is open and freed when you close it.