Calculate required margin, free margin, and margin level at different leverage ratios with margin call threshold alerts.
This calculator shows how much account equity a forex position would reserve as margin at a selected leverage ratio. It divides position notional, expressed in the account currency, by leverage, then uses total used margin to calculate free margin and margin level. It also compares that level with the entered margin-call threshold. The common mistake is treating free margin as the maximum safe loss. It is only current headroom, and market losses can reduce equity while the position remains open.
A concrete input and expected output from the current implementation.
Input
Account equity: 1,000 USD Position notional: 10,000 USD Leverage: 20:1 Other used margin: 0 USD Margin-call threshold: 100%
Expected output
Required margin: 500 USD Total used margin: 500 USD Free margin: 500 USD Margin level: 200% Threshold alert: No
Required margin is 10,000 / 20 = 500 USD. Free margin is 1,000 - 500 = 500 USD, and margin level is 1,000 / 500 x 100 = 200%, which is above the 100% threshold.
For a position whose notional value is already expressed in the account currency, required margin equals notional value divided by the leverage multiple. A 20:1 ratio therefore reserves one twentieth, or 5%, of the position value. Comparing leverage ratios changes the collateral requirement without changing the entered position notional.
The calculator subtracts total used margin, including the proposed position, from equity to obtain free margin. Margin level is equity divided by total used margin, multiplied by 100. The threshold alert reports whether that calculated percentage has reached the entered margin-call level. It does not determine when a broker will liquidate positions.
No. Higher leverage reduces the margin reserved for the same position notional, but it does not reduce that position's gain or loss from a given exchange-rate movement. It can leave more free margin and make larger positions possible. This calculator measures collateral and account headroom, not an economically safe position size.
The broker may use live equity, currency conversion rates, every open position, tiered margin rates, hedged-position rules, or charges not represented by the entered figures. Confirm that notional, account currency, equity, leverage, and existing used margin match the trading account. Even then, the calculator's threshold alert is not a liquidation prediction.
The example and behavioral notes were checked against the browser implementation. Standards and primary references below define the relevant format, formula, or platform behavior.
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