Margin calculator
This margin calculator works out the deposit a provider holds as collateral while a leveraged trade is open. Choose the pair, enter the size and the leverage, and the result shows both the margin and the full value of the position. The second figure is the one that decides your gains and losses.
The margin calculator formula
Required margin = position value ÷ leverage
For EUR/USD, one euro is worth the current price in dollars. For USD/JPY or USD/CAD, the base is already the dollar. For gold, one lot is 100 ounces at the gold price.
Worked examples
These figures are illustrative.
| Position | Position value | Leverage | Margin |
|---|---|---|---|
| EUR/USD at 1.08, 0.5 lots | 0.5 × 100,000 × 1.08 = $54,000 | 30:1 | $1,800 |
| XAU/USD at $2,300, 0.1 lots (10 oz) | 10 × 2,300 = $23,000 | 20:1 | $1,150 |
In the first example, $1,800 controls $54,000. A 1% move in EUR/USD changes the position's value by $540, which is 30% of the margin. Leverage multiplies the percentage result on your margin by the leverage ratio.
Retail leverage limits
In the UK and EU, retail CFD leverage is capped at 30:1 for major currency pairs, 20:1 for non-major pairs, gold and major indices, 10:1 for other commodities and minor indices, 5:1 for individual shares and 2:1 for crypto-assets. Australia applies similar limits, and US retail forex is capped at 50:1 on majors. Providers may offer less.
How to read the result
The margin is not your maximum loss. It is the amount set aside while the trade is open. If losses reduce your equity towards the margin, the provider can close positions; in the UK and EU, retail accounts must be closed out when equity falls to 50% of the required margin. Keep free equity well above the margin so normal price swings do not force an exit.
Pair this tool with the position size calculator, which sets the size from your risk, and read how forex trading works for the wider context.
Short answers
Does higher leverage mean higher risk?
Leverage lets you open a larger position for the same deposit. The risk comes from the size of that position; using less leverage for the same trade simply ties up more margin.
What is a margin call?
A warning, or an automatic action, when your equity falls towards the margin required for open positions. It can lead to positions being closed at a loss.
Sources
- European Securities and Markets Authority, CFD product intervention measures
- UK Financial Conduct Authority, CFD rules for retail clients