Margin
Basics
What it means
The cash you must deposit to open and keep a leveraged position. It is collateral your broker holds while you trade with borrowed funds.
Example
To hold a $10,000 position at 10x leverage, you need $1,000 of margin. If your loss eats into that $1,000 and falls below the maintenance level, the broker issues a margin call.
Mistake beginners make
Beginners think margin is "extra buying power given free." It is a loan secured by your full account, and the broker can sell your other positions without asking to repay it.
Related terms
- Leverage — Using borrowed money from your broker to control a larger position than your cash would al…