Free Margin

Free margin is the difference between your account equity and your used margin. It's the amount available to open new trades or absorb losses on existing ones. As trades go in your favor, equity rises and free margin grows. As trades go against you, equity falls and free margin shrinks. When free margin hits zero or negative, you've hit a margin call. The formula: free margin = equity − used margin. If you have $10,000 equity and $2,000 used margin (from open positions), free margin is $8,000. You can open new trades with that $8,000 of available capacity. Monitoring free margin is critical for traders running multiple positions. You don't want to use 100% of your free margin on one trade — that leaves zero room for the next setup or for an existing position to draw down without triggering a margin call.