What is margin level, and when does a margin call happen?
The Nuqta Markets team · 28 October 2026 · 7 min read · How we write
In short
- Margin level = equity ÷ used margin × 100.
- Margin is a deposit set aside, not a fee; equity is what moves with open profit and loss.
- Margin call levels vary by broker; the size of the position decides how fast you get there.
Margin level is the one percentage on a trading platform that tells you how close the account is to the broker stepping in. It is simple arithmetic, but it depends on four other numbers that beginners often confuse. Here they are in one worked example.
The five numbers on the account line
| Term | What it is | Formula |
|---|---|---|
| Balance | Money in the account from closed trades | deposits ± closed P/L |
| Equity | Balance plus the profit or loss of open trades | balance + floating P/L |
| Used margin | The deposit set aside to keep positions open | notional ÷ leverage |
| Free margin | What is left for new trades or losses | equity − used margin |
| Margin level | How many times equity covers the used margin | equity ÷ used margin × 100 |
Margin is not a fee. It is part of your own money, held aside while the position is open and released when it closes. Only equity moves with the price.
One trade, worked through
A $2,000 account opens 1 lot of EURUSD at 1.1000 with 1:100 leverage.
- Notional: 100,000 euros × 1.1000 = $110,000
- Used margin: $110,000 ÷ 100 = $1,100
- Pip value: $10 per pip
- At entry (ignoring the spread): equity $2,000, free margin $900, margin level 2,000 ÷ 1,100 × 100 = 181.8%
Now the price moves against the position:
| Against the trade | Equity | Free margin | Margin level |
|---|---|---|---|
| 0 pips | $2,000 | $900 | 181.8% |
| 30 pips | $1,700 | $600 | 154.5% |
| 60 pips | $1,400 | $300 | 127.3% |
| 90 pips | $1,100 | $0 | 100% |
Illustrative calculation, not an expectation of results.
At 90 pips free margin reaches zero and margin level is exactly 100%. Many brokers place their margin call around there: a warning, and often a block on opening new trades. The level itself varies by broker, so the numbers above use 100% only as an example.
Position size decides the distance
Keep the $2,000 account and the same pair, and change only the lot:
| Lot | Used margin | Pip value | Margin level at entry | Pips to a 100% margin call |
|---|---|---|---|---|
| 1.00 | $1,100 | $10 | 181.8% | 90 |
| 0.50 | $550 | $5 | 363.6% | 290 |
| 0.20 | $220 | $2 | 909.1% | 890 |
Illustrative calculation, not an expectation of results.
The formula for the last column is (equity − margin-call % × used margin) ÷ pip value. Halving the lot more than triples the distance, because both the margin and the pip value shrink at once. That is the main lesson: the margin level is a direct readout of position size against equity.
Margin level is not a risk plan
A planned stop loss works in the opposite direction. On the 0.20-lot trade, a 30-pip stop risks $60, or 3% of the account, while the margin call is 890 pips away. A healthy margin level says only that the broker will not intervene; how much is lost at the stop is set by the size, which the lot size calculator works out from the stop. The risk-reward calculator then shows what the target must be for the trade to make sense.
In short
Equity moves, margin sits still, and margin level is one divided by the other. Watch free margin, know your broker's margin call level, and remember the lot is what moves the distance. The next step is the level where positions are actually closed, in stop out level: a 5-step calculation, and the ratio behind the margin itself in leverage ratios in numbers.
Questions people also ask
What is free margin?
Free margin is equity minus used margin: the amount still available to open new positions or absorb losses. When it reaches zero, margin level is exactly 100%.
Why is there no margin level when no trade is open?
Margin level divides equity by used margin. With no open positions the used margin is zero, so the ratio is undefined and most platforms leave it blank.
Does a margin call close my trades?
Usually not. A margin call is a warning level, often around 100%, after which new trades may be blocked. Positions are closed at the lower stop out level, which also varies by broker.
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