How margin works
Margin is the deposit you post to open a leveraged position, expressed as a percentage of the full position value. It is not a fee and not a cost: it is collateral the broker holds while the trade is open, returned when you close minus spread and any overnight financing. Margin and leverage are two views of the same number. A 1:30 leverage ratio is the same as a 3.33 percent margin requirement.
Worked example
To open a $30,000 EUR/USD position at 1:30 leverage, you post about $1,000 of margin. The remaining balance in the account is free margin, the buffer that absorbs adverse moves. As losses grow, free margin shrinks. When equity falls toward the maintenance margin, the platform issues a margin call, and if the level is breached the position closes at the stop-out point.
Margin and the leverage caps on Volity
Because margin is set by the leverage cap, the asset class decides the minimum deposit. Under CySEC retail rules, applied through UBK Markets (licence 186/12), forex majors need about 3.33 percent margin (30:1), minors and gold about 5 percent (20:1), single stocks 20 percent (5:1), and crypto 50 percent (2:1). Retail clients also get negative balance protection.
Why it matters
Margin is the mechanism that can close your trade against your will. Always keep free margin well above the maintenance level so a normal adverse swing does not trigger a stop-out, and decide size with position sizing, not with the maximum the margin allows.
Read the full breakdown in our forex trading guide.
