Margin
The collateral required to open and maintain a leveraged trading position.
Definition
Margin is the amount of money required to open and maintain a leveraged trading position. It acts as collateral against potential losses. Margin requirements vary by broker, instrument, and regulatory jurisdiction.
How It Works
- Used margin: funds locked in open positions
- Free margin: available for new trades
- Margin level: (Equity / Used Margin) × 100%
- Below margin call level triggers warnings
Types of Margin
Initial Margin
Required to open a position
Maintenance Margin
Required to keep position open
Variation Margin
Daily profit/loss adjustments
Trading Tips
1
Monitor your margin level constantly
2
Never use all available margin
3
Different instruments have different margin requirements
Related Terms
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