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Margin used indicates the amount you have actually used in a Forex trade, excluding any leverage.
When trading in forex, your broker will provide you with leverage or debt in addition to your own investment. The amount of leverage will depend on the margin ratio provided by your broker. A higher margin ratio will mean less investment from your side and more from your broker. With the margin used, you can calculate the amount you have invested (without leverage) in each forex transaction.
Example 1: You want to buy some units of the currency pair USD-GBP. Each unit of this currency pair is priced at 0.6300. To buy 100 units of USD-GBP, it will cost 62 GBP. If your broker provides a margin ratio of 2:1, you will use 31.40 GBP of your own for this trade. This amount is known as the margin used. If your broker offers you a margin ratio of 100:1, your margin used will be only 0.62 GBP.
Example 2: You want to purchase 10,000 units of JPY-USD. With each unit priced at USD 0.00874, the price of 10,000 units will be USD 87.4. If your broker provides a margin ratio of 3:1, your margin used will be USD 29.13. And if your broker is offering a margin of 100:1, your margin used will be USD 0.874.
Use our Forex margin calculator to calculate the margin used for each trade.
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