The amount of your account equity locked up as collateral for open positions — can't be used for new trades until positions close.
Used margin is the cash that's currently locked up as collateral for your open positions. It's calculated based on your leverage and your position sizes. At 1:100 leverage, opening a 1-lot EUR/USD position uses about $1,000 in margin. That $1,000 is locked until you close the trade.
Used margin doesn't represent risk. It's just collateral. The actual risk is determined by your stop loss distance — used margin is what the broker sets aside to make sure you can cover your trade. The two numbers are independent.
As you add more positions, used margin grows and free margin shrinks. When used margin gets too high relative to equity, you're at risk of a margin call. The relationship is captured in the margin level percentage.
Many retail traders blew up in 2020 by stacking 5-10 positions on the same direction during the COVID crash. Each position looked small individually, but total used margin hit 80%+ of equity — and a normal drawdown wiped them out.
Frequently asked about used margin
What is an used margin in trading?+
The amount of your account equity locked up as collateral for open positions — can't be used for new trades until positions close.
When will I see used margin used in real trading?+
On every broker dashboard. Updated in real time as positions open and close.
What is the most common mistake traders make with used margin?+
Confusing used margin with risk. They're different things. You can have $1,000 of used margin and a $20 stop loss — your real risk is $20, not $1,000.
What do experienced traders know about used margin that beginners don't?+
Track total used margin as a percentage of equity. Pros keep this under 25%. Above 50% means you're heavily exposed and a single bad day can cause a margin call.
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