Free margin vs Used margin
Look-alike pair
Full entries: Free margin · Used margin.
Free margin and used margin are both components of your account equity, but the single difference that matters is that used margin is the portion already committed to open positions, while free margin is what remains available for new trades or withdrawals. Used margin is not a cost or a loss; it is a temporary hold. Free margin is the residual after that hold.
Side by side
| Free margin | Used margin | |
|---|---|---|
| Definition | Equity minus used margin; the amount available to open new positions or withdraw. | The amount of equity locked as collateral for current open positions. |
| Calculation | Free Margin = Equity − Used Margin. | Used Margin = sum of margin requirements for all open positions. The exact formula varies by broker and instrument. |
| Field mark | Shown as a separate line labeled 'Free Margin' or 'Available Margin' on the platform. | Shown as 'Used Margin' or 'Margin' on the platform. |
| Effect of price move | Changes as equity changes; can increase or decrease even if positions are unchanged. | Generally unchanged by price moves unless you open, close, or adjust positions. |
| Role in margin call | When free margin reaches zero, you cannot open new positions and may face a margin call. | Used margin itself does not trigger a margin call; the level of equity relative to used margin does. |
| Withdrawability | Only free margin is available for withdrawal. | Used margin cannot be withdrawn while positions remain open. |
Which word to use
Use free margin when you mean the funds still available to trade or withdraw; use used margin when you mean the collateral already tied up by open positions.
Family: XI · Look-alikes · Index A–Z