Margin is the amount of capital required in your account to open and maintain a leveraged position. It acts as a security deposit for your broker, not a fee or transaction cost.

The margin formula is: Required Margin = (Lot Size × Contract Size × Price) / Leverage. Higher leverage means lower margin requirements, but also amplified risk.

For example, to open 1 standard lot of EUR/USD at 1.0847 with 1:100 leverage, you need: (1 × 100,000 × 1.0847) / 100 = $1,084.70 in margin.

Free margin is the difference between your equity and used margin. When free margin drops to zero, you receive a margin call and your broker may close your positions automatically.

Understanding margin is crucial for managing multiple open positions. Always ensure you have sufficient free margin to withstand normal market fluctuations without triggering a margin call.