If you have recently started trading, you might be seeing a lot of new terms that appear confusing. We’ll explain more about the terms margin and free margin in this short article.
Margin is the amount of funds in account currency that is held by a broker for keeping an order open. The remaining amount of equity in your account is known as free margin.
Points to note:
- Free margin denoted in your trading platform indicates the amount of funds available to open new trades, while margin denotes the amount held for the trades that are already open.
- Margin of your trades is used for margin level calculation and directly affects when your account reaches margin call. Free margin does not affect margin call.
- The free margin available in your Personal Area is available for withdrawal. The funds held as margin cannot be withdrawn while trades are open.
- The sum total of both margin and free margin at any given time is known as Equity.