Margin
It's not your money, it's your deposit.
What it is
Margin is the amount of money your broker holds as collateral when you open a leveraged position. It's not a fee or a cost, it's your own capital set aside to guarantee the trade. When you close the position, the margin is released back to your available balance.
How it works
With 1:100 leverage, opening a 1-lot EUR/USD position (worth ~$100,000) requires $1,000 in margin. That $1,000 is locked. You can't use it for other trades or absorb losses with it. Your free margin (account equity minus used margin) is what's actually available.
Margin call vs. stop out
- Margin call: A warning that your equity is getting close to your used margin. You can still trade but should reduce exposure.
- Stop out: When equity drops below a threshold (often 50% of used margin), the broker automatically closes your largest positions to free up margin. This happens without your consent and at the worst possible prices.
In prop firms: You'll almost never hit a margin call because the drawdown limits will terminate your account long before margin becomes an issue. The drawdown limit is your real constraint, not margin.
Recommended: Margin, Free Margin, Margin Level, why these three numbers are the same thing and should never be part of your trading decisions.