Margin & Leverage Calculator

Margin is the portion of capital your broker holds as collateral while a leveraged position is open. It is not a fee, it is your own capital locked temporarily. When the position closes, the margin is returned (adjusted for profit or loss).

Leverage is the ratio of your position size to the margin required to open it. A 10:1 leverage means a $100,000 position requires only $10,000 in margin. It amplifies both gains and losses proportionally, so a 1% move in the underlying becomes a 10% gain or loss on your margin.

Leverage Ratio = Position Size ÷ Margin Requirement. If you control a $100,000 position with $10,000 of margin, your leverage is 10:1. The calculator's Leverage mode solves for this: enter your position size and the margin your broker requires.

Margin Requirement = Position Size ÷ Leverage Ratio. With a $100,000 position and 50:1 leverage, you need $100,000 ÷ 50 = $2,000 of margin. The calculator's Margin requirement mode solves for this: enter position size and your broker's leverage ratio.

Return on margin = (Profit ÷ Margin) × 100. If a $100,000 notional position backed by $10,000 margin gains $5,000, the return on margin is 50%, not 5%. Leverage profits mode calculates this: enter your margin requirement, leverage ratio, entry price, and exit price.

Beginners should use 2:1 to 10:1 to limit risk. Many professionals keep effective leverage between 5:1 and 20:1 regardless of what their broker offers. Higher leverage does not increase your probability of being right, it only increases the speed at which you can lose capital.