Free margin

Free margin is the portion of a trader's equity that is not locked up as "used margin" for open trades. It is calculated as Equity minus Used Margin. This available capital can be used to open new positions, withstand further adverse price movements on existing trades, or cover potential losses. As open positions fluctuate in value, free margin changes dynamically, reflecting the account's immediate capacity.

For a retail trader, free margin is a critical indicator of account health and risk capacity. A declining free margin indicates less buffer against market volatility and increased risk of a margin call or stop-out. Maintaining sufficient free margin allows traders to manage risk effectively, avoid forced position closures, and take advantage of new trading opportunities without overleveraging their account.