Margin level
Margin level is account equity divided by the margin currently used, expressed as a percentage.
It measures how much equity is supporting the open positions. A high percentage means ample equity above the margin held; a falling percentage means losses are eating into the buffer. The broker watches this single number to decide when to warn and when to force-close.
This page covers the mechanic; it is not trading advice.
The number the broker watches
Margin level is the ratio between what the account is worth right now and the Margin locked against its open positions. Equity is the balance plus or minus the unrealised profit or loss on those positions; used margin is the sum of the margin held across them. Divide the first by the second, multiply by 100, and the result is the margin level the platform displays.
An account with $10,000 of equity holding one position that uses $1,000 of margin has a margin level of $10,000 ÷ $1,000 × 100 = 1,000%. The position can lose a great deal before the buffer is gone. As the position moves against the account, equity falls while used margin stays fixed, so the percentage drops. At $2,000 of equity against the same $1,000 of used margin the margin level is 200%, and the account is approaching the levels where the broker intervenes.
Margin level is often confused with free margin, but the two are different quantities. Free margin is an amount of money, the equity not tied up as used margin. Margin level is a percentage, the ratio of equity to used margin. They fall together as losses mount, but the broker's margin call and stop-out act on the percentage, not the dollar figure. The same free-margin amount is a high, safe margin level on a lightly used account and a low one on a heavily used account, which is why watching only the dollar figure can hide how close the percentage sits to the stop-out.
The formula and the thresholds that matter
The calculation is a single ratio.
Margin level
Margin level = (Equity ÷ Used margin) × 100- Equity (balance ± open P&L)
- $2,170
- Used margin
- $1,085
Margin level
200%
Two broker-defined thresholds sit on this percentage. The margin call, commonly around 100% of used margin, is the warning level: equity has fallen to roughly the margin held, and no new positions can be opened. The stop-out, often between 20% and 50%, is where the broker begins closing positions automatically to lift the margin level back above the floor. Both numbers vary by broker and account type and are published in the broker's terms; they are not a single universal figure.
On a 1 standard lot EUR/USD position at 1:100 leverage, used margin is about $1,085. A margin call near 100% triggers when equity falls to roughly $1,085, and a stop-out near 50% triggers near $543 of equity. The distance between the current margin level and the stop-out is the room a position has before the broker, not the trader, closes it, which is why the margin level is watched alongside the Stop-loss, the trader's own price-controlled exit.
Why the margin level moves
The margin level changes for two reasons: equity moves, or used margin moves. Unrealised profit and loss on open positions changes equity tick by tick, so the margin level rises as positions profit and falls as they lose. Opening another position raises used margin, which lowers the margin level even before any loss, because the same equity now supports more held margin. Closing a position releases its margin and lifts the level. A trader adding positions into a losing book is lowering the margin level from both directions at once.
Margin level across several positions
With more than one position open, used margin is the sum of the margin held across all of them, and the margin level is the account's single equity figure divided by that total. A loss on one position lowers equity and pulls the whole account's margin level down, even positions sitting in profit. This is why a stop-out can close a winning trade to rescue the account: the broker acts on the aggregate margin level, not on any one position. A hedged book, long and short the same instrument, may hold reduced or netted margin depending on the broker, which changes the denominator.
Leverage sets how sensitive the figure is. At 1:500 the same EUR/USD position holds about $217 of margin rather than the $1,085 it holds at 1:100, so a $10,000 account shows a much higher starting margin level. The higher leverage also lets the trader open a far larger position, on which equity swings faster as price moves. Higher Leverage does not make the account safer; it moves the same risk from the size of the margin requirement to the speed of the equity change.
Related terms
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Common questions
What is a margin level of 100%?
It means account equity has fallen to equal the margin held against open positions. On most retail accounts this is around the margin-call level: the broker stops the account opening new positions, but does not yet close anything. It sits above the stop-out level, where automatic closing begins, so 100% is a warning that the buffer is nearly gone rather than the point of forced liquidation. The exact percentages are set by the broker.
What is the difference between margin level and free margin?
Margin level is a percentage — equity divided by used margin, times 100. Free margin is a money amount — equity minus used margin, the capital available to open new positions or absorb losses. They move together but answer different questions: free margin tells you how much room is left in dollars, while margin level tells you how that room compares with the margin already committed. The broker's margin call and stop-out act on the margin-level percentage.
At what margin level does the broker close my positions?
At the stop-out level, which is broker-defined and commonly somewhere between 20% and 50% of used margin, with the exact figure in the broker's terms. When equity falls far enough that the margin level reaches the stop-out, the broker begins closing open positions automatically — usually the largest losing one first — to raise the margin level back above the floor. The close-out executes at the market price at that moment, which in a fast market can be worse than the level that triggered it.
Does opening another position change my margin level?
Yes, it lowers it, before any loss. Opening a position increases used margin, the denominator of the ratio, while equity is unchanged, so the margin level falls. A trader who opens new positions while existing ones are losing pushes the figure down from both sides at once: equity falling on the open losses and used margin rising on the new trades. That combination is the fastest route from a comfortable margin level to a stop-out.