What exactly happens at a margin call?

Normally a warning arrives first, once margin level drops through an initial threshold — often 100 % of initial margin. When the close-out level is hit, typically 50 %, the system liquidates automatically, usually starting with the largest losing position. There is no grace period and no option to let the trade breathe. Keeping the buffer means adding funds or reducing size before that point.

Is margin the same thing as a loan?

Not quite. On a securities account a margin loan really is borrowed money and you pay interest on the borrowed portion. With CFDs and futures the margin is collateral that stays in your account; economically the position still behaves as a financed one, and the funding is charged through overnight fees or built into the contract price. Either way there are holding costs, which the break-even calculator makes visible.

Does negative balance protection rule out owing money?

For retail clients in the EU and the UK, losses per account are capped at the funds deposited — there is no obligation beyond that. The protection applies per account, not per position, and does not extend to professional clients or, usually, to accounts held outside the EU. It also does not prevent losing the whole balance; it only stops that loss from becoming a debt.

Why does my broker require more margin than this calculator shows?

Brokers frequently apply rates above the regulatory minimum — around earnings, elections and rate decisions, over weekends, or on especially volatile single names. Tiered margin by position size is common too: the first contracts cost less collateral than the last. What binds is always the broker's own margin schedule at the time of trading, not the regulatory floor.

Calculators

Margin calculator

How much capital a leveraged position ties up.

Margin is not a fee but collateral: the slice of your balance the broker locks while the position is open. This calculator shows how large that slice is at a given leverage — and, more importantly, how far the price may move before the position is closed for you.

Inputs

Instrument class (ESMA cap)

Leverage30:1

Leverage only changes the margin locked — not the profit or loss of the position.

Position size (units)

In forex, 100,000 units is one standard lot and 10,000 a mini lot.

Price per unit

Account balance

Used here as equity; unrealised profit on other positions is not included.

Account currency

Margin close-out at … % of initial margin50 %

The ESMA rule is 50 %. Individual brokers close out earlier.

Required margin

€360.00

Notional position value: €10,800
Free margin: €4,640.00
Margin level: 1,389 %

Distance to margin call

44.63 %

Price points: 0.4820
Price at margin call: 0.5980
Buffer until close-out: €4,820

What leverage does to the buffer

Leverage	Required margin	Free margin	Move to close-out
2:1	€5,400	-€400	21.30 %
5:1	€2,160	€2,840	36.30 %
10:1	€1,080	€3,920	41.30 %
20:1	€540	€4,460	43.80 %
30:1	€360	€4,640	44.63 %
50:1	€216	€4,784	45.30 %
100:1	€108	€4,892	45.80 %

ESMA retail leverage caps

Instrument class	Max leverage	Minimum margin
Forex majors	30:1	3.3 %
Forex minors, gold, major indices	20:1	5.0 %
Commodities (ex gold), minor indices	10:1	10.0 %
Single shares & ETFs	5:1	20.0 %
Crypto	2:1	50.0 %

Assumptions behind this calculation

A long position and a single open trade are assumed. With several positions, free margin is the sum across all of them — the buffer is then smaller than shown here.
Equity is taken to be the balance; unrealised profit or loss on other positions is not included.
The close-out point follows the ESMA rule of 50 % of initial margin; individual brokers set it higher. Your own figure is in the trading terms.
Excluded: spread, commission, conversion markups and financing. All four reduce equity, and therefore the buffer, a little every day.
Overnight or weekend gaps can jump past the close-out level. Negative balance protection caps a retail client's loss in the EU/UK at the account balance — it falls away with professional status.

Note: These calculators are for information only and are not investment advice. Content on Brokaro is for information purposes only and is not investment, legal or tax advice.

How this is calculated

Margin, free margin, margin level

Initial margin is the amount locked when the position opens: notional divided by leverage. What remains of the balance is free margin — the buffer for adverse moves and for further positions. Margin level expresses equity as a percentage of initial margin; once it falls below the broker's close-out threshold the position is liquidated, without a question and without regard for the trading idea.

Leverage sets the buffer, not the profit

Higher leverage does not increase the profit of a given position — that depends only on size and price movement. It reduces the margin locked, which tempts traders into a bigger position. That is precisely what shortens the distance to a forced close-out. The table in the calculator shows the relationship directly: same position, different leverage, dramatically different room to be wrong.

The ESMA caps and what sits behind them

Binding retail leverage limits have applied across the EU since 2018: 30:1 for forex majors, 20:1 for minors, gold and major indices, 10:1 for other commodities and minor indices, 5:1 for single shares, 2:1 for crypto. Alongside them come margin close-out at 50 % of initial margin, negative balance protection and a ban on trading incentives. The FCA imposed effectively matching rules for the UK; Switzerland has no comparable cap.

When a provider offers more leverage

Higher leverage reaches European retail clients in only two ways. Either you elect professional-client status — which requires meeting two of three criteria (trading frequency, a portfolio above EUR 500,000, relevant professional experience) and costs you some or all of negative balance protection, investor compensation and ombudsman access. Or the account sits with an entity outside the EU, over which European supervisors and compensation schemes have no jurisdiction. Always check which legal entity the account agreement names.

Frequently asked questions

Leverage

Required margin

Free margin

Move to close-out

2:1

€5,400

-€400

21.30 %

5:1

€2,160

€2,840

36.30 %

10:1

€1,080

€3,920

41.30 %

20:1

€540

€4,460

43.80 %

30:1

€360

€4,640

44.63 %

50:1

€216

€4,784

45.30 %

100:1

€108

€4,892

45.80 %

Instrument class

Max leverage

Minimum margin

Forex majors

30:1

3.3 %

Forex minors, gold, major indices

20:1

5.0 %

Commodities (ex gold), minor indices

10:1

10.0 %

Single shares & ETFs

5:1

20.0 %

Crypto

2:1

50.0 %

How this is calculated

Margin, free margin, margin level

Leverage sets the buffer, not the profit

The ESMA caps and what sits behind them

When a provider offers more leverage

Frequently asked questions