Margin calculator
The margin calculator divides the full value of a position by the leverage you choose. The answer is the deposit your provider holds back while the trade is open. It is useful for checking that a trade fits your account, and for seeing how large the underlying position really is.
Margin calculator formula
Required margin = position value ÷ leverage
For EUR/USD the base currency is the euro, so the position value is the number of euros multiplied by the EUR/USD price. For USD/JPY the base is the dollar, so no conversion is needed. For gold, one lot is usually 100 ounces.
Worked examples
These figures are illustrative.
- EUR/USD, 0.5 lots at 1.1000, 30:1: 50,000 × 1.1000 = $55,000 position value; $55,000 ÷ 30 ≈ $1,833.33 margin.
- Gold, 0.1 lots (10 oz) at $2,400, 20:1: 10 × $2,400 = $24,000 position value; $24,000 ÷ 20 = $1,200 margin.
In the first example, a 1% move in EUR/USD changes the position's value by $550, which is 30% of the margin posted. That ratio is what leverage means in practice.
Leverage limits for retail clients
| Instrument (UK and EU retail) | Maximum leverage | Minimum margin |
|---|---|---|
| Major currency pairs | 30:1 | 3.33% |
| Non-major pairs, gold, major indices | 20:1 | 5% |
| Other commodities, minor indices | 10:1 | 10% |
| Individual shares | 5:1 | 20% |
| Crypto CFDs | 2:1 | 50% |
Australia applies similar caps. US retail forex allows up to 50:1 on major pairs and 20:1 on others. UK and EU providers must close positions once your account equity falls to 50% of the required margin.
Reading the result
- Margin is a deposit, not a cost and not a loss limit.
- Keep free margin well above zero; using most of your balance as margin leaves no room for normal price moves.
- Size the trade from risk with the position size calculator, then use this tool to confirm it fits.
Sources
- UK Financial Conduct Authority, restrictions on CFDs for retail clients
- European Securities and Markets Authority, product intervention measures on CFDs