A deposit held for a leveraged trade

Margin and margin calls

The lesson in full

Leverage lets you trade big with a small deposit. That deposit is the margin. Knowing how it works keeps your account alive.
Margin needed = position size ÷ leverage. At 30:1, a US$30,000 EUR/USD position locks US$1,000. At 5:1 for shares, a US$1,000 position locks US$200.
Your equity is your balance plus or minus open profit and loss. Margin level = equity ÷ margin used. It falls as losses grow.
Say you have US$2,000 and use US$1,000 as margin. Lose US$1,500 and equity is US$500: 50% of your margin. In the EU, UK and Australia, the broker must then start closing your positions.
A margin call is the warning that your margin is running low: add money or close trades. Brokers set their own warning levels, so read yours.
Common mistake
Myth: you can only lose the margin you put up. You can lose your whole balance. Retail clients in the EU, UK and Australia get negative balance protection, so they can't lose more than the money in their account.
Key takeaway
Use only a small slice of your margin and set a stop loss. Then a margin call should never be how a trade ends.

Margin is... A deposit held for a leveraged tradeMargin isn't a cost. It's part of your own money that the broker sets aside while the trade is open.
At 30:1, a US$30,000 position needs about... US$1,000 marginMargin = position ÷ leverage. US$30,000 ÷ 30 = US$1,000.
A margin call happens when... Losses eat into your marginAs losses grow, equity falls toward the margin you use. The broker warns you, then starts closing trades.
Equity US$500, margin used US$1,000. Margin level? 50%500 ÷ 1,000 = 0.5, or 50%. In the EU, UK and Australia, retail positions start being closed at this level.