Forex: Margin Used
Margin used indicates the amount you have actually used in a Forex trade, excluding any leverage.
Margin used in Detail
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.
Forex: Supporting guides and articles
Use our Multi-Currency Forex Margin Calculator which is updated daily to calculate the best forex rate and manipulate forex margin ratio metrics for bespoke Forex Investment results. A popular and powerful free Forex tool.
- Forex Exchange Rate: Exchange rate is the price of one currency in another currency. Exchange rate is also known as the rate of exchange
- Forex Currency Pair: When you deal in the forex market, you deal in currency pairs. You cannot buy an individual currency. Instead you buy units of currency pairs.
- Forex Leverage: Forex leverage refers to investing in the forex market on a credit basis or by using debt.
- Forex Market: Forex or the foreign exchange market is used by people for buying and selling of currencies. The forex market is also known as the currency market.
- Forex Trading: Forex trading refers to the buying and selling of currencies to take advantage of the price movements and volatility of the forex market.
- Forex Margin Call: Margin call is a call from your forex broker when your account balance goes below the maintenance margin.
- Forex Margin Ratio: Forex Trading: Margin ratio is used for expressing the forex leverage in a ratio format.
- Forex Margin Used: Margin used indicates the amount you have actually used in a Forex trade, excluding any leverage.
- Forex Maintenance Margin: Maintenance margin refers to the minimum amount you need to maintain in your forex trading account.
- Forex: Price Interest Points (PIPs): PIPs or Price Interest Points are commonly used by forex traders to indicate profits or losses.
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