GLOSSARY
Margin level
The percentage your broker watches to decide whether your positions stay open.
Updated 2026-09-05 · Educational content · No broker owns this site
Quick answer. Margin level is your equity divided by the margin currently used, shown as a percentage. It measures how close an account is to a forced close-out. Under EU and UK rules brokers must close retail positions when it falls to 50% of the initial margin required.
Margin level turns two dollar figures into one number a broker can act on. High means room to breathe; low means the account is close to being closed for you. It is the single figure worth watching while a trade is open.
How is margin level calculated?
Divide equity by used margin and multiply by 100.
- Equity: $1,880 (a $2,000 account, 40 pips underwater at $3.00 a pip)
- Used margin: $1,100
- Margin level: $1,880 ÷ $1,100 × 100 = 171%
What percentage is dangerous?
One threshold is written into law rather than left to the broker. ESMA's 2018 measures, kept permanently in the UK by FCA PS19/18, require a CFD provider to close one or more of a retail client's positions once account funds plus unrealised profits fall below half the total initial margin — a margin level of 50%.
| Margin level | What it means |
|---|---|
| Above 100% | Equity exceeds the margin in use; there is free margin left |
| 100% | Free margin is exactly zero; most brokers stop accepting new positions |
| Below 100% | Warning territory — the broker's own margin call level usually sits here |
| 50% | EU and UK rules require the close-out; the stop-out happens whether you are watching or not |
Brokers outside those rulebooks set their own stop-out figures, which can sit far below 50%. A lower number is not a favour: it means the account is allowed to erode further before anything stops it.
What do beginners get wrong about margin level?
Watching it is not the same as managing it. Margin level is an outcome — it falls because a position was too large for the account, and by the time it is dropping fast the useful decisions were already made. The number to set in advance is risk per trade; margin level then takes care of itself.
Related terms
- Leverage · Margin · Equity
- Free margin · Margin level
- Margin call · Stop-out level
- Lot · Pip — the two numbers that decide how fast the margin picture moves
Frequently asked questions
What is a healthy margin level?
There is no official figure, but an account comfortably above 300% has most of its equity unused, which usually means positions are small relative to the account. What matters more is the distance to the 50% close-out and how many pips of ordinary movement it represents.
Is margin level the same as leverage?
No. Leverage is fixed by your account and the instrument; margin level moves with every tick because equity moves. Two accounts on identical 30:1 leverage can sit at 500% and 60% depending on position size.
My margin level is 90% — has something already closed?
Not necessarily. Below 100% you have no free margin and are in your broker's warning zone, but the close-out mandated in the EU and UK happens at 50%. Check your broker's own stop-out figure, since it may differ outside those jurisdictions.
Sources
- ESMA — Additional information on the agreed product intervention measures (27 March 2018)
- FCA PS19/18 — Restricting contract for difference products sold to retail clients (2019)
- FirstPip knowledge base — concepts/leverage-and-margin (sources S007, S010, S011, S013)