Basics
Margin
The collateral required to open and maintain a leveraged position.
Full Definition
Margin is the amount of money required as collateral to open and maintain a leveraged trading position. It's not a fee but rather a portion of your account equity set aside by the broker. Required margin varies based on leverage, lot size, and the instrument being traded. Understanding margin is essential to avoid margin calls and account liquidation.
Example
To open a 1 standard lot ($100,000) EUR/USD position with 100:1 leverage, you need $1,000 margin (1% of position size). This $1,000 is locked until you close the position.
Formula
Required Margin = Position Size ÷ LeverageRelated Terms
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