Margin level explained

How it works

Platforms commonly express margin level as a percentage. It rises when equity is high relative to used margin and falls when losses reduce equity or when more margin is committed to open positions.

What to check

Check the provider's own formula and thresholds because terminology can differ. The important levels are usually where new positions are restricted, where a margin call is triggered and where positions can be closed automatically.

• Know the broker's formula
• Find margin-call thresholds
• Find automatic close-out thresholds

Limits and risks

A falling margin level can force action even when the trader does nothing. Broker close-out rules may realize losses before the market has a chance to recover.