Money
Margin
The deposit a broker requires to open a leveraged position.
Margin is the portion of your own capital set aside to open and maintain a leveraged trade. It is not a fee but a good-faith deposit held while the position is open, and it is returned when the position closes.
Required margin is the position size divided by the leverage ratio. Free margin — equity minus used margin — is what remains available for new positions and for absorbing floating losses.
Taught in these lessons
- Lots & leverage — Forex Foundations
- Margin calls & stop-outs — Risk & Position Sizing
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