Margin is an amount reserved on the account balance in order to back the transaction being open. Once the trade is closed, this amount becomes available again.

How Do I Calculate My Margin?

Example 1

Let's assume your account balance is EUR 10,000, and you want to invest EUR 200 in EUR/USD with 500 multiplier. When you open your trade, your margin will be calculated as follows:

Margin = Investment Amount * Multiplier / Leverage

In our example:

Margin = 200*500*1/30 = EUR3,333.

When you open your traders, you should bear in mind you need to have some available or free margin on your account. In fact, free margin is the difference between your current account balance and your margin already being used:

Free Margin = Account balanceUsed Margin

How much margin will be free for opening new positions if my account balance is 10,000, and the used margin is 3,333?

In this case, your free margin will be: 10,000 - 3,333=6,667 euros, which you can use for opening new trades.