Costs & risk

Margin

Margin is the amount of your funds set aside to open and keep a leveraged position. It is not a fee: it is released when the position is closed, after any gain or loss is settled.

Also called: used margin, required margin, initial margin, deposit margin

Hypothetical example

Hypothetically, a position of $50,000 at 1:200 needs $250 of margin ($50,000 ÷ 200). That amount is held while the position is open.

Used in these guides

Costs & risk8 min read
Margin call and stop out: how they work
How margin level is calculated, when a margin call or a stop out happens, and what each one does to your open positions.
Basics7 min read
What is a CFD (contract for difference)?
How a contract for difference works, what it costs, and why leverage makes it a high-risk product.
Costs & risk8 min read
Position sizing: how to work out how many lots to trade
A step-by-step method for setting the size of a trade from the amount you are prepared to lose, your stop loss and pip value.

Back to the glossary

Risk Warning: CFDs are complex instruments and come with a high risk of losing money.

Margin

Hypothetical example

Related terms

Used in these guides

Margin call and stop out: how they work

What is a CFD (contract for difference)?

Position sizing: how to work out how many lots to trade