Margin calculator
How margin is calculated
Position value (USD) = lots × contract size × price of the base currency in dollars
Example: 1 lot of EUR/USD at 1.0800 is a €100,000 position worth $108,000. At 30:1 leverage the margin is $108,000 ÷ 30 = $3,600.
For pairs where the dollar is the base currency, such as USD/JPY, the position value is simply 100,000 dollars per lot. For crosses like EUR/GBP, the calculator asks for the euro's dollar rate to convert the position value.
Margin level and margin calls
Your equity is your balance plus or minus open profits and losses. The margin level is equity divided by used margin, as a percentage. If losses push it too low, the provider may warn you (a margin call) and then close positions automatically. In the UK and EU, retail CFD providers must close positions when equity falls to 50% of the required margin.
Leverage limits for retail traders
| Asset (retail clients) | UK and EU maximum |
|---|---|
| Major currency pairs | 30:1 |
| Other currency pairs, gold, major indices | 20:1 |
| Other commodities, non-major indices | 10:1 |
| Individual shares | 5:1 |
| Cryptocurrencies | 2:1 in the EU; the UK bans crypto derivatives for retail clients |
In the US, retail forex leverage is capped at 50:1 on major pairs and 20:1 on others. Australia applies limits similar to the UK and EU. A firm offering much higher leverage to retail clients in these countries is either not authorised there or treating clients as professionals, which removes protections. See how to check a broker.
Lower margin does not mean lower risk
High leverage reduces the deposit needed, not the size of the position. A 1-lot EUR/USD trade gains or loses about $10 per pip whether the margin is $3,600 or $360. What changes is how quickly losses eat through your account. Read risk management for traders and CFDs explained.
This calculator assumes a US dollar account and uses the prices you enter. Providers may set higher margin requirements than the legal minimums, especially around weekends and major news.
What is the best leverage for forex?
There is no best leverage for forex in general, only a position size that fits your stop and your risk limit. Higher leverage lowers the margin a trade needs; it does not change what each pip is worth. Many experienced traders use far less than the maximum their broker allows.
Frequently asked questions
What does 30:1 leverage mean?
It means you can control a position worth 30 times your margin. A $3,000 deposit supports a position of about $90,000.
What happens if my margin runs out?
The provider will usually warn you and then close some or all of your positions automatically to stop further losses. In the UK and EU this must happen when equity falls to 50% of required margin for retail CFD clients.
Sources
- ESMA: product intervention measures on CFDs
- FCA: CFD rules for retail clients