Margin and Leverage Calculator
How much of your money does a position lock up, and how hard does a market move hit your account? Enter a position value and your leverage.
Margin & Leverage
The full value of the position you want to control (units × price), in your account currency.
30 means 30:1 — every 1 of margin controls 30 of position.
Adds free margin, effective leverage and the impact of market moves on your account.
Margin required
$5,000.00
You control $100,000.00 while committing $5,000.00 of margin — 5% of the position. Margin is held by the broker as collateral; it is not a fee and is released when the trade closes.
| If price moves against you | You lose | Of your margin | Of your equity |
|---|---|---|---|
| −0.5% | $500.00 | 10% | 5% |
| −1% | $1,000.00 | 20% | 10% |
| −2% | $2,000.00 | 40% | 20% |
| −5% | $5,000.00 | 100% | 50% |
Leverage decides how much margin you must lock up. It does not change how much a price move earns or costs: that depends on your position size. Brokers also apply margin-call and stop-out levels that are not modelled here.
How was this calculated?
- Margin required = Position value ÷ Leverage = $100,000.00 ÷ 20 = $5,000.00
- Effective leverage = Position value ÷ Equity = $100,000.00 ÷ $10,000.00 = 10×
- Free margin = Equity − Margin = $10,000.00 − $5,000.00 = $5,000.00
What does this mean?
Margin is the deposit your broker holds while a trade is open. It is not a cost and you get it back when the trade closes. It is set by the position’s value and the leverage your broker allows: at 20:1 you need one twentieth of the position value as margin.
Effective leverage is a different thing: your position value divided by your account equity. It tells you how sensitive your account really is. Ten times leverage means a 1% market move changes your account by about 10%.
The formula
Margin required = Position value ÷ Leverage
Effective leverage = Position value ÷ Account equity
Free margin = Equity − Margin required
Largest position = Equity × Leverage
Worked example
A position worth $100,000 at 20:1 leverage needs 100,000 ÷ 20 = $5,000 of margin. On a $10,000 account that is 10× effective leverage: a 1% move against you loses $1,000, which is 10% of the account, and $5,000 of free margin remains.
Frequently asked questions
How is margin calculated?
Divide the full value of the position by your leverage. A $50,000 position at 30:1 needs about $1,667 of margin.
Does higher leverage mean more risk?
Leverage on its own only changes how much margin you must post. Your risk comes from position size and stop distance. But high leverage makes it easy to open a position that is large relative to your account, and effective leverage is what determines how much a price move hurts.
What leverage is available?
It depends on your broker and jurisdiction. Retail traders in the UK and EU are typically limited to 30:1 on major currency pairs, with lower limits on other instruments. Check your broker’s terms.
What is a margin call?
A warning from your broker when your equity falls too close to the margin your positions require, often followed by automatic closing of positions (a stop-out). The exact levels are set by the broker and are not modelled here.
Learn more
This tool is for education and general information only and is not financial advice. Results are estimates that exclude spreads, commissions, swaps and slippage. Trading carries a risk of loss. Preferences you choose, such as your account currency, are remembered only in your own browser.