reference · Risk & sizing
Margin Level and Free Margin: Calculate Both From One Account Snapshot
In a common leveraged-account model, free margin equals equity minus used margin, while margin level equals equity divided by used margin times 100%. They measure collateral headroom, not the maximum possible trading loss.
Key points
- Use equity and used margin from the same account snapshot and currency.
- A margin percentage is undefined when its denominator is zero.
- Broker thresholds, portfolio rules and changing margin requirements govern real order eligibility.
Scope and assumptions
- The arithmetic uses a simple equity-minus-used-margin model with USD figures and fixed used margin during the stress example. Account credit, portfolio offsets and broker rules can alter practical interpretation.
Use two formulas with different units
Free margin is a money amount; margin level is a ratio expressed as a percentage. In the common model used here:
Free margin = equity − used margin
Margin level = equity ÷ used margin × 100%
MetaQuotes exposes balance, equity, used margin, free margin and margin level as distinct account properties. Read the current values from the account instead of substituting a previous balance or a headline leverage ratio.
A snapshot and a loss scenario
Consider a hypothetical USD account with equity of $2,400 and used margin of $800. Free margin is $1,600, and margin level is 300%. Now model a $600 fall in equity while keeping used margin fixed solely to isolate the arithmetic.
| Measure | Initial snapshot | After assumed $600 equity loss |
|---|---|---|
| Equity | $2,400 | $1,800 |
| Used margin | $800 | $800 |
| Free margin | $1,600 | $1,000 |
| Margin level | 300% | 225% |
Neither 300% nor 225% is a profit percentage. A 300% margin level means equity is three times the current used-margin amount. It does not mean the account has earned three times its deposit, nor that its positions are three times safer than another account's.
In reality, used margin may change with prices, exchange rates, position composition, broker requirements or time of day. A stress test that freezes it is useful for one question but cannot establish the account's actual future liquidation point.
Keep thresholds and risk budgets separate
A broker may define margin-call or stop-out conditions in percentages or money terms. The numerical threshold and the positions closed first are account rules, not universal platform constants. Spotware documents broker-defined stop-out conditions; use the policy applicable to the actual account.
A planned stop-loss budget asks a different question: how much could a specified price movement cost for the chosen quantity, allowing for execution and charges? Margin asks how much collateral is required. Lower collateral requirements do not reduce the contract's money-per-point exposure.
Check the proposed order in context
A standalone margin estimate is not always the incremental margin of a portfolio. MetaQuotes explicitly states that OrderCalcMargin excludes current pending orders and open positions. Hedging, netting and portfolio offsets therefore need separate treatment when determining the post-trade account state.
For several copied accounts, inspect each destination's equity, existing positions and current margin rules. A source account's spare capacity does not establish destination eligibility. Use the balance and equity reference to reconcile changing account values, and the futures margin guide for why a broker's intraday allowance can change before a position ends.
When used margin is zero, do not manufacture a finite percentage by substituting a tiny denominator. Show that the ratio is not applicable, retain the equity figure, and inspect the platform's own display convention. That prevents a false comparison with accounts holding positions.
Questions and answers
Is free margin the amount I can safely lose?
No. It is an account collateral measure under the broker's calculation. Losses, margin changes and other positions can consume it; a separate exposure and exit-risk analysis is required.
What is margin level when no margin is used?
The ratio divides by zero and is not a finite percentage. Platforms may show a blank, zero or another display convention. That display should not be treated as an ordinary comparable ratio.
Will positive free margin guarantee a new order is accepted?
No. The new order may require more margin or fail another account, symbol, size or market check. Use the broker's current validation and inspect its actual response.
Sources and further checks
Use the current source for your exact instrument, account and platform. Referencing a general specification does not establish support for every TradeCopier workflow.
- MetaQuotes: Account Information · Checked September 19, 2026
- MetaQuotes: OrderCalcMargin · Checked September 19, 2026
- Spotware: Trading Conditions · Checked September 19, 2026
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