How Is Forex Margin Calculated?
Margin is collateral associated with exposure. A simple constant-leverage model divides position notional by leverage, but broker-specific rules can differ substantially.In this guide
Choose the notional currency
One lot of a contract with 100,000 base units has base notional of 100,000. At EURUSD 1.10, that is €100,000 or $110,000. At 100:1 leverage, the simple model gives €1,000 or $1,100 margin. These are illustrative leverage settings, not statements of availability.
Handle gold separately
For a gold contract of 100 oz per lot, 0.10 lot at $2,000/oz has $20,000 quote notional. At 20:1 leverage, the simple margin estimate is $1,000. Gold uses quote-currency margin in this calculator. A non-USD account needs conversion.
Compare with the broker ticket
Tiered margin, exposure concentration, hedged positions and instrument restrictions can change requirements. A broker may also recalculate margin as prices move. Margin is not a stop-loss amount and does not specify maximum possible loss. Compare the model with the broker’s current written specifications and order ticket before relying on it.
Express notional in the account currency
A 10,000 EUR position at an illustrative EURUSD price of 1.1000 has $11,000 notional. At constant 100:1 leverage the simplified margin is $110. If the account is in another currency, convert the relevant amount using a clearly stated rate. Confusing base units with dollar notional can understate the collateral estimate.
Changing leverage changes one input
At 50:1, that same $11,000 notional requires $220 in the simple model. Its profit or loss for a fixed price movement remains unchanged because the position units did not change. A smaller collateral requirement does not make a given position’s adverse movement less expensive.
Why can the broker show another figure?
Tiered schedules, instrument-specific rates, hedging treatment and temporary margin changes can differ from the constant-leverage assumption. Free margin also depends on account equity and other positions. The calculator does not predict a liquidation price or reproduce an account’s full margin engine.
Try the related calculator with your own inputs and review its assumptions.
Further reading: Calculation methodology and related guides.
Broker example: OANDA margin rules. Requirements are broker- and account-specific.
Educational information, not personalized investment advice. Verify broker rules and contract specifications.