Free Margin
a.k.a. Usable margin, Available margin
The money in your account not tied up as margin, available to open new trades or absorb losses.
In plain English
The money in your account not tied up as margin, available to open new trades or absorb losses.
Free margin is account value (equity) minus the margin locked up by open positions. It is your buffer.
As open trades lose, equity falls and free margin shrinks. When it hits zero, you cannot open new trades, and if losses keep coming you approach a margin call or stop-out.
Worked example
Working out free margin
- Account value (equity): $2,000.
- Margin used by open trades: $500.
- Free margin = $2,000 − $500 = $1,500.
Bottom line: $1,500 of buffer before new trades are blocked, and less once losses grow.
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