What is a margin calculator used for?

Margin calculators are commonly used by traders to determine the margin requirements for making trades in leveraged financial markets. When you trade on margin, your broker lends you money to increase your buying power, allowing you to enter larger positions than permitted by your actual capital.

A margin calculator helps you calculate the initial margin needed to open a leveraged trade position on commodities, stocks, forex, etc., based on the current margin requirements set by your broker or exchange. It also lets you determine how much free margin is available for further trades.

Margin calculators take into account factors like your account balance, leverage amount, position size and instrument being traded to provide mathematical risk management. They allow you to preview your potential margin obligations before placing trades. This helps control losses by ensuring you have sufficient margin collateral as the price fluctuates.