Used Margin
Margin & Leverage
Used margin is the total amount of a trader's funds currently locked up as collateral across all open leveraged positions.
What is used margin?
Used margin (sometimes shown as “margin used” on a trading platform) is the sum of the margin requirements for every open position in an account, added together. It represents the total amount of a trader’s own funds that is currently tied up as collateral and therefore unavailable to open new trades.
Every time a new position is opened, its margin requirement is added to used margin; every time a position is closed, that portion is released back into free margin.
A worked example
Suppose a trader opens three positions on the same account, each requiring the following margin:
| Position | Instrument | Margin required |
|---|---|---|
| 1 | 1 standard lot EUR/USD | $500 |
| 2 | 0.5 standard lot GBP/USD | $300 |
| 3 | 1 mini lot USD/JPY | $200 |
Used margin is simply the total: $500 + $300 + $200 = $1,000. If the account’s equity is $4,000, that leaves $3,000 of free margin available for new positions or to absorb losses on the existing three.
If the trader then closes the USD/JPY position, used margin drops back to $800, and free margin rises by $200 to $3,200 — regardless of whether that position was closed at a profit or a loss (the released $200 is the margin itself, separate from the trade’s realized result, which is booked to the account balance).
Why used margin matters
Used margin is the direct measure of how much of an account’s capital is committed at any given moment. A high used-margin figure relative to equity means little room left to absorb adverse price moves, and it directly shrinks the account’s margin level — the ratio brokers monitor to decide when to issue a margin call or trigger a stop-out. Traders running multiple simultaneous positions should watch used margin closely, since it accumulates across every open trade, not just the most recent one.
Quick recap
- Used margin is the running total of margin locked up by all currently open positions.
- It rises when a new position is opened and falls when a position is closed.
- Free margin and used margin always add up to account equity.
- A high used-margin-to-equity ratio is a sign of an over-leveraged, higher-risk account.