Margin calculator
This margin calculator works out the deposit, or required margin, that a broker sets aside when you open a leveraged position. It is not a fee: it is collateral held while the trade is open. The number matters because it decides how much room your account has before the broker starts closing positions.
The formula
(converted into US dollars when the quote currency is not USD)
Margin level = equity ÷ used margin × 100%
Worked example
Illustrative numbers. You open 0.8 lots of EUR/USD at 1.1000. That is 80,000 euros, a position worth 80,000 × 1.1000 = $88,000.
| Leverage | Required margin |
|---|---|
| 20:1 | $88,000 ÷ 20 = $4,400.00 |
| 30:1 (UK/EU/Australia cap on majors) | $88,000 ÷ 30 = $2,933.33 |
| 50:1 (US cap on majors) | $88,000 ÷ 50 = $1,760.00 |
Higher leverage lowers the margin, but it does not change the exposure: each pip is still worth $8 on 0.8 lots whatever the leverage.
Reading the result: margin level and close-out
Suppose, at 30:1, your equity (balance plus open profit or loss) falls to $2,000. Your margin level is 2,000 ÷ 2,933.33 × 100 = about 68%. For retail CFD clients in the UK and EU, the provider must start closing positions when the margin level reaches 50%. Many brokers also send a warning, a margin call, at a higher level first.
Retail leverage caps in the UK and EU are 30:1 on major currency pairs, 20:1 on other pairs, gold and major indices, 10:1 on other commodities, 5:1 on individual shares and 2:1 on crypto. The lower the leverage, the more a price has to move before a close-out.
Use this tool together with the position size calculator: size the trade by the loss you can accept, then confirm the margin fits comfortably inside your account. The fees guide covers the overnight financing that leveraged positions also pay.
Sources
- UK Financial Conduct Authority, CFD rules for retail clients
- European Securities and Markets Authority, CFD product intervention measures