Formula
| Item | Expression |
|---|---|
| Required margin | Trading size (units) × rate ÷ leverage |
| Margin level | Equity ÷ required margin × 100 (%) |
| Maximum lots you can open | Account balance × leverage ÷ (100,000 units × rate) |
Equity is your balance plus unrealized profit or loss. The tool calculates it immediately after opening, when unrealized profit or loss is 0.
How to calculate required margin
Offshore forex offers high leverage, so you can trade a large size with a small margin. When USD/JPY is 150 yen, the value of 1 lot (100,000 units) is 15,000,000 yen, and at 1,000× leverage the required margin is 15,000 yen.
The higher the leverage, the smaller the required margin, but for the same lot size the profit or loss from price moves is the same. Leverage only determines how little capital you need to open a position; the size of the risk is determined by your lot size.
Margin level and stop-out
If the margin level falls below the stop-out level set by the broker (for example, 20% or 0%), your positions are force-closed. The larger the required margin relative to your balance, the lower the margin level, and a small adverse move can trigger a stop-out.
- With a balance of 100,000 yen and a required margin of 15,000 yen, the margin level is about 667%
- If the margin level falls below 100%, unrealized losses have already taken more than half of your balance
- Some brokers include bonuses in equity and others do not
Points to note
Actual leverage may be limited by your account balance, the instrument and the time of day (such as around economic releases). Check each broker's maximum leverage and stop-out level on the broker page and the official website.