Forex Margin Calculator
Forex Leverage and Margin Calculator
User Instructions
Input Options
Instrument Choose trading products such as Forex margin, stocks, cryptocurrencies, metals, indices, contracts for difference, etc.
Deposit currency Select account currency, such as US Dollar (USD), Euro (EUR), etc.
Leverage Enter your account trading leverage ratio.
Lots (trade size) Enter the number of lots you want to trade.
Price Enter the current price of the trading product.
Calculation Result
Deposit amount to open the trade Display the required margin amount to establish the position now.
What is leverage and what is margin?
Leverage trading allows traders to operate larger positions with less capital (i.e., margin), which can amplify profits but also potentially increase losses. This trading method is also known as margin trading.
The role of leverage is to amplify potential profits and losses. For example, if you buy EUR/USD at a price of 1.0000 without using leverage, the price must drop to zero for you to bear the entire loss, or it must rise to 2.0000 for your investment to double. However, if you trade using 1:100 leverage, the price only needs to change by 1% to generate the same profit or loss.
Margin is the amount of money that traders must pay when opening a new position. It is not a trading cost or fee, and it will be refunded after the trade is closed. The purpose of the margin is to protect the broker from losses. When losses cause the trader's margin to fall below a predetermined stop-loss percentage, the broker will automatically close one or all open positions. The broker may issue a margin call warning before such liquidation, but may also choose not to.
How does leverage work?
Using 100:1 leverage, traders can open positions that are 100 times larger than without leverage. For example, if the cost of opening a 0.01 lot EUR/USD position is $1,000 (without leverage), and the broker offers 100:1 leverage, then the trader only needs to use $10 as margin. Of course, traders can also choose to use lower leverage, such as 30:1 or 5:1, or even choose not to use leverage at all.
Note: The higher the leverage ratio, the greater the risk. Most professional traders choose to use a lower leverage ratio, up to 5:1, or not to use leverage at all, keeping the risk percentage per trade at a moderate level (e.g., 2%).
The higher the leverage ratio, the greater the risk. Most professional traders choose to use a lower leverage ratio, up to 5:1, or not use leverage at all, keeping the risk percentage of each trade at a moderate level (for example, 21%).