Forex Margin Calculator

What this calculator does

Before a broker will let you hold a currency position, they want a slice of your account set aside against it. This calculator works out how big that slice is. You give it the size of the position, the price, and your leverage ratio, and it returns the margin required.

The arithmetic is short. Multiply the number of units by the price to get what the position is actually worth, then divide by your leverage:

Margin = (Units × Price) ÷ Leverage

So at 20 to 1, you are putting up a twentieth of the position's value. The interesting part is not the calculation. It is what that number does and does not tell you about the risk you have taken on.

Margin is a deposit, not a fee

Worth settling first, because the word misleads people. Margin is not money you spend. It is money that gets locked. The broker ring-fences it inside your account as security while the trade is open, and when you close the position it is released back to you, plus or minus whatever the trade made or lost.

So the margin figure is not the cost of trading and it is not the amount you can lose. It is the portion of your account that stops being available for anything else. What you can lose is set by the position's full value, not by the deposit, which is the difference that catches people out and the thing this page is really about.

Filling in the four fields

1. Account currency and pair. Pick the currency your account is denominated in and the pair you are trading.
2. Current rate. The current price of the pair. This is what converts your units into a value, so it needs to be the live rate for the pair you have chosen rather than the figure the box happens to open with.
3. Margin ratio. Your leverage, from 1 to 1 up to 200 to 1. See the section below on which of these you are actually permitted to use.
4. Number of units. The position size in units of the base currency. A standard lot is 100,000 units, a mini lot 10,000, a micro lot 1,000.

Press Calculate for the margin, or Reset to clear the fields. Because the calculation runs on the rate you type in, the figure is only as good as that rate, and it lines up most cleanly when your account currency is the second currency of the pair you have selected.

The same trade at four different leverages

Take 10,000 units of GBP/USD at a price of 1.3200. The position is worth 10,000 × 1.32, which is 13,200 dollars, and that figure does not change no matter what leverage you pick. Here is what changes:

• At 1 to 1: margin $13,200.00, the whole thing
• At 20 to 1: margin $660.00
• At 30 to 1: margin $440.00
• At 200 to 1: margin $66.00

The deposit falls away to almost nothing at the high ratios. Now hold that against the thing that did not move: the position is worth 13,200 in every single case, so a 1 percent move against you costs 132 dollars in every single case. Not 132 at one leverage and less at another. The same 132.

What leverage changes, and what it leaves alone

That comparison contains the whole lesson, and it runs against how leverage is usually described. Leverage does not magnify the gain or loss on a given position. Ten thousand units of GBP/USD makes or loses exactly the same money per pip whether your account is set to 20 to 1 or 200 to 1. Your profit and loss is driven by position size and price movement, and leverage appears nowhere in it.

What leverage actually changes is how much of your account stays free, and that has two consequences worth taking seriously. The first is temptation. If a position only ties up 66 dollars instead of 660, the obvious thought is that you could run ten of them. That is where leverage does its damage, not by amplifying a trade you were going to take anyway, but by making a far larger one look affordable.

The second is how little room you have. At 200 to 1, the 66 dollars of margin behind a 13,200 position is wiped out by a move of half a percent. Regulated brokers in the EU and UK must also close positions out when account equity falls to 50 percent of the required margin, so the exit arrives before that. The smaller the deposit, the shorter the distance between a normal market wobble and a forced close.

So read the margin figure as what is locked, and then look separately at the position value beside it, because that second number is the one carrying your risk. Sizing a trade by what you can afford to lose, rather than by what the margin requirement will permit, is the difference the calculator cannot make for you.

The ratios your broker may not be allowed to offer you

The dropdown runs up to 200 to 1, and depending on where you are, most of the top of that list may be unavailable to you as a retail client.

Since 2018, European regulators have capped retail leverage at 30 to 1 on major currency pairs and 20 to 1 on non-major pairs, with tighter limits again on other assets, and the UK adopted matching rules on a permanent basis. The same package brought in the 50 percent margin close-out rule, negative balance protection so a retail client cannot lose more than their account, a ban on trading bonuses, and a requirement that firms display the percentage of their own retail accounts that lose money. That last disclosure is worth looking for on any broker's site, because it is a real, audited number rather than marketing.

Limits differ by jurisdiction and change over time, and offshore brokers advertise far higher ratios precisely because they sit outside these rules. If you are trading as a retail client under EU or UK regulation, the practical ceiling on the majors is 30 to 1, which means the honest range of this calculator for you is the lower half of that dropdown.

Questions people ask

Is the margin money I have lost?

No. It is locked as security while the position is open and released when you close it, adjusted for your profit or loss. It is not a fee.

Does higher leverage increase my profit or loss?

Not on a given position. The same number of units at the same price makes or loses the same amount either way. Higher leverage frees up account balance, which tends to lead to larger positions, and that is what increases the risk.

What happens if the trade goes against me?

Losses eat into your account equity, and once it falls far enough your broker closes the position. Under EU and UK rules that happens at 50 percent of the required margin, so the thinner your margin, the sooner it arrives.

How many units is a lot?

A standard lot is 100,000 units of the base currency, a mini lot is 10,000, and a micro lot is 1,000. Enter the unit count rather than the number of lots.

References

The required margin is the position's notional value divided by the leverage ratio. The retail leverage caps of 30 to 1 on major currency pairs and 20 to 1 on non-major pairs, along with the 50 percent margin close-out rule, negative balance protection, the restriction on incentives, and the standardised risk warning stating the percentage of loss-making retail accounts, were introduced by the European Securities and Markets Authority and made permanent in the United Kingdom by the Financial Conduct Authority.

1. European Securities and Markets Authority, Restriction on contracts for differences for retail clients. https://www.esma.europa.eu/node/86076
2. Financial Conduct Authority, PS19/18: Restricting contract for difference products sold to retail clients. https://www.fca.org.uk/publication/policy/ps19-18.pdf