1.00 = 100,000 units
UK FCA retail max: 1:30 for majors
| Leverage | Margin Required | Free Margin | Max Lots |
|---|
Understanding Margin in Trading
Margin is the collateral your broker requires to open and maintain a leveraged position. It's not a fee — it's a portion of your account equity set aside as a deposit. When you close the trade, the margin is released back to your account.
Formula: Required Margin = (Trade Size in units × Price) ÷ Leverage. For 1 lot EUR/USD at 1.085 with 1:30 leverage: (100,000 × 1.085) ÷ 30 = $3,616.67.
UK FCA limits: Retail traders in the UK are limited to 1:30 for major forex pairs, 1:20 for minor pairs, 1:10 for commodities, and 1:2 for crypto. Professional accounts can access higher leverage.
A margin call occurs when your margin level drops below your broker's threshold (typically 50–100%). The broker may close some or all of your positions to prevent your account going negative. FCA-regulated brokers provide negative balance protection for retail accounts.
They're inversely related. Leverage of 1:30 means you need 1/30th (3.33%) of the trade value as margin. Higher leverage = less margin required = more buying power, but also more risk per pip movement.