1. What is Margin Requirement?

Margin requirement is the amount of capital required to open and maintain a leveraged position in trading. It represents a percentage of the total position size that must be deposited as collateral.

2. How Does the Calculator Work?

The calculator uses the margin formula:

Where:

• Position Size — Total value of the position in USD
• Margin Percentage — Percentage required by broker (e.g., 2% for 50:1 leverage)

Explanation: The formula calculates how much capital is needed to open a position based on the leverage ratio or margin percentage required by your broker.

3. Importance of Margin Calculation

Details: Proper margin calculation helps traders manage risk, avoid margin calls, and understand the capital requirements for their trading strategies.

4. Using the Calculator

Tips: Enter position size in USD and margin percentage (e.g., 2 for 2%). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the relationship between margin and leverage?
A: Margin percentage is the inverse of leverage ratio. 2% margin = 50:1 leverage (100/2 = 50).

Q2: How does margin requirement vary by instrument?
A: Different assets (forex, stocks, crypto) have different margin requirements based on volatility and broker policies.

Q3: What happens if my account falls below margin requirements?
A: You may receive a margin call and be required to deposit more funds or positions may be automatically closed.

Q4: Are margin requirements the same for all brokers?
A: No, margin requirements can vary between brokers and may change during volatile market conditions.

Q5: What's the difference between initial and maintenance margin?
A: Initial margin is required to open a position, while maintenance margin is the minimum required to keep it open.