Forex glossary
Margin (deposit margin)
Documentation context: The symbol specification and account model determine initial, maintenance and hedged margin and the treatment of pending orders.
Margin is collateral required for a position or order under the instrument and account rules. It is not commission, the full notional purchase price or a maximum-loss limit. Closing releases the collateral requirement, while losses and costs still affect the remaining funds.
Illustrative example
How does it work in practice?
In a hypothetical model, a position with a notional value of 10,000 USD requires 500 USD of margin. The 500 USD is collateral; it does not buy the whole position or cap its loss.
One account, four different figures
Balance, equity and available collateral
Model with no credit, fees or blocked amounts: balance 10,000 USD, open P/L −800 USD and used margin 2,000 USD.
On a narrow screen, the table can be scrolled horizontally.
| Term | What it describes | Shared example |
|---|---|---|
| Balance | Booked funds; open P/L does not change balance in this model. | Balance remains 10,000 USD. |
| Equity | Current account value; margin is not deducted from it. | 10,000 − 800 = 9,200 USD. |
| Margin (deposit margin) | Required collateral, rather than a fee already paid. | The positions require 2,000 USD of collateral. |
| Free margin (available margin) | Equity minus margin; not the same as withdrawable cash. | 9,200 − 2,000 = 7,200 USD. |
| Margin Level | Equity relative to margin, expressed as a percentage. | 9,200 / 2,000 × 100% = 460%. |
Takeaway: Identify whether a figure is a booked amount, account valuation, collateral requirement or ratio. Do not deduct margin from equity.
Change an assumption, see the result
What changes if…?
Change required margin while holding equity fixed. Observe free margin and margin level without treating collateral as a fee.
Model: equity = balance + open P/L; free margin = equity − margin. No credit, fees or other blocks. The stop-out threshold is hypothetical; the actual formula and action depend on the provider’s terms.
Check your understanding
Calculate a model collateral requirement and distinguish it from cost and notional.
Show the answer and explanation
1,500 USD
30,000 × 5% = 1,500 USD margin. This is required collateral, not a paid cost or a loss cap.
Read the account and its margin thresholds
Step 4 / 8 · 0 / 8 reviewed
View the full sequence →Progress is saved only in this browser.
Try the numbers in a calculator →
Read the fuller explanation
Related terms
Sources and documentation
- MetaTrader 5: executing trades
Execution modes, requotes, position handling and local trailing on this platform.
Document read: - MetaTrader 5: Market Watch
Symbol specifications define contract size, volume constraints, margin calculation, execution rules and the commission charging model.
Document read:
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.