The deposit a broker requires to open and maintain a leveraged position.
Margin is the collateral posted to open a leveraged position - it is not a fee, but funds temporarily reserved from the account's free equity. Required margin is calculated as the notional position value divided by the leverage ratio: at 30:1 leverage, opening a USD 30,000 position (0.3 standard lots of EUR/USD) requires USD 1,000 in margin. The remaining equity in the account stays available as free margin, which can be used to open additional positions or absorb floating losses.
Brokers monitor two thresholds: the margin call level and the stop-out level, both expressed as a percentage of required margin. A typical setup might be a 100% margin call warning followed by a 50% stop-out. When floating losses push equity below the margin call level, the broker notifies the client to deposit additional funds. If equity continues falling to the stop-out level, the broker automatically closes the largest losing positions to restore the margin ratio - regardless of whether the trader agrees or is even online.
Used margin, free margin, and margin level are displayed on most platforms in real time. A healthy margin level - at least 200–500% - gives a trade room to move against the position without triggering stop-out. Traders who regularly operate near margin call thresholds are effectively over-leveraged: a single news spike can close positions at the worst possible price and leave no capital for recovery. Position sizing relative to account equity, not maximum available leverage, is the correct discipline.
Worked Example
Account equity: $10,000. Leverage: 30:1. You open 1 standard lot EUR/USD (notional ~$100,000). Required margin = $100,000 ÷ 30 = $3,333. Free margin = $10,000 − $3,333 = $6,667. If the trade moves 66 pips against you, floating loss = $660, margin level = $9,340 ÷ $3,333 = 280% - still healthy. If losses reach $6,667 (667 pips), equity equals used margin (100% margin call level) and the broker issues a warning.