On this page (8 questions)
- ↑ Calculator
- 1What does a margin calculator do?
- 2How do you calculate margin on a forex trade?
- 3How do you calculate margin on JPY and cross pairs?
- 4How do you calculate margin on gold (XAUUSD)?
- 5How do you calculate margin on US30 and NAS100?
- 6How does margin work on futures?
- 7What is the difference between leverage and margin?
- 8Does margin tell you how much you can lose?
What does a margin calculator do?
It works out how much of your account your broker sets aside to open a trade, from the size, the price and your leverage. Use it before a trade to check you have enough free margin, or to see why a platform rejected an order.
Margin isn’t a fee. It’s part of your own balance that the broker holds while the trade is open and releases when you close it. What’s left is your free margin, which is what new trades can use.
How do you calculate margin on a forex trade?
Margin = lots × units per lot ÷ leverage, in the pair’s base currency, converted to your account currency. Buying 1.00 lot of EUR/USD at 1.08500 is a €100,000 position worth $108,500.00, so at 1:50 the margin is $108,500.00 ÷ 50 = $2,170.00.
Worked example
- Position value in EUR1.00 lots × 100,000= €100,000.00
- Converted to USD€100,000.00 × 1.08500= $108,500.00
- Margin$108,500.00 ÷ 50= $2,170.00
The price only converts the position into your account currency. In a EUR account the same trade needs €100,000.00 ÷ 50 = €2,000.00, whatever EUR/USD is trading at.
One lot is 100,000 units of the base currency at most brokers, so 0.10 lots needs a tenth of the margin. If your broker’s lot is a different size, change it under Contract in the calculator.
How do you calculate margin on JPY and cross pairs?
The margin starts in the pair’s base currency, so it only needs converting when that isn’t your account currency. On USD/JPY in a USD account, 1.00 lot at 1:50 is $100,000.00 ÷ 50 = $2,000.00, with no rate needed at all.
On a cross pair, the base currency is converted at its rate against your account currency. Example: 1.00 lot of GBP/JPY in a USD account at 1:30, with GBP/USD at 1.27000.
Worked example
- Position value in GBP1.00 lots × 100,000= £100,000.00
- Converted to USD£100,000.00 × 1.27000= $127,000.00
- Margin$127,000.00 ÷ 30 is about 4,233.3333 rounded to $4,233.33
The yen doesn’t appear anywhere in that sum. The calculator never fetches a rate, so enter the one from your platform.
How do you calculate margin on gold (XAUUSD)?
Margin = lots × ounces per lot × price ÷ leverage. At a broker that uses 100 ounces per lot, 0.20 lots at $2,380.00 is a $47,600.00 position, so at 1:20 the margin is $2,380.00.
Worked example
- Position value in USD0.20 lots × 100 oz × $2,380.00= $47,600.00
- Margin$47,600.00 ÷ 20= $2,380.00
Gold usually has lower leverage than major forex pairs at the same broker, so check the leverage for the symbol, not just your account’s. 100 ounces per lot is common but not universal.
How do you calculate margin on US30 and NAS100?
Margin = lots × value per point per lot × price ÷ leverage, and the value per point depends on your broker’s contract. At $1 per point per lot, 1.00 lot of US30 at 42,150.0 is a $42,150.00 position, so at 1:20 the margin is $2,107.50.
Worked example
- Position value in USD1.00 lots × $1.00 × 42,150.0= $42,150.00
- Margin$42,150.00 ÷ 20= $2,107.50
At $10 per point the same lot is a $421,500.00 position and needs ten times the margin. You’ll find the value per point in your broker’s contract specification for the symbol.
How does margin work on futures?
Futures have no leverage setting: the exchange and your broker set a fixed margin per contract, so margin = margin per contract × contracts. If your broker asks $1,500.00 per contract, 2 contracts need $3,000.00.
Worked example
- Margin in USD$1,500.00 × 2 contracts= $3,000.00
The amount differs between brokers and changes over time, so the calculator has no preset for it. Many brokers ask less to hold a contract during the day than overnight.
What is the difference between leverage and margin?
Leverage is the ratio between the position value and the margin, and margin is the amount itself. At 1:30, the margin is 1/30 of the position value, which is about 3.3%.
Some brokers quote a margin rate instead of leverage. To enter it here, divide 100 by the rate: a 5% margin rate is 1:20, and 2% is 1:50.
Does margin tell you how much you can lose?
No. Margin is what your broker holds while the trade is open, and what you lose depends on where you exit, so a trade can lose more or less than its margin.
To limit a loss, size the trade from your stop with the position size calculator. Margin only tells you whether the account can open it.