Used Margin
Trading BasicsThe total amount of margin currently locked as collateral for all open positions. Also called required margin.
What Is Used Margin?
Used margin is the total amount of Margin currently reserved by your broker as collateral for your open trades. If you have three open positions each requiring $500 in margin, your used margin is $1,500. Used margin is released when you close a position.
Used Margin vs. Free Margin
Your account Account Equity is always divided between used margin and Free Margin. As you open more positions, used margin increases and free margin decreases. The relationship is: Equity = Used Margin + Free Margin. When floating losses eat into your equity, your Margin Level drops, even though the used margin amount stays the same.
Managing Used Margin
Keeping used margin low relative to your equity is a core risk management practice. If used margin consumes most of your equity, even a small adverse move can trigger a margin call. Check your platform's margin summary regularly and use our Margin Calculator before opening new trades to see how much additional margin they require.
Related Terms
Margin
The deposit required to open and maintain a leveraged position. Margin is not a fee. It is collateral held by the broker while your trade is open.
Free Margin
The amount of money in your account that is not tied up as collateral for open positions. Free margin equals equity minus used margin.
Margin Level
The ratio of account equity to used margin, expressed as a percentage. Margin level = (Equity / Used Margin) x 100%. Below 100% typically triggers a margin call.
Leverage
A mechanism that allows you to control a position larger than your deposit. Expressed as a ratio like 1:30, meaning $1 controls $30 in currency.