GlossaryAccount and money

Margin

The portion of your equity the broker sets aside as collateral while a position is open.

Source FINRA

Margin is not a fee. It is a deposit. The broker holds it for as long as a position is open, and gives it back the moment that position closes. If you ever read margin as a cost line in your account, you are reading it wrong.

Open a 1-lot EUR/USD at 1:30 leverage and the broker locks about one-thirtieth of the position's notional value. That locked slice is your used margin. Whatever equity is left is free margin: room to open more positions, or room for the existing ones to breathe.

In the US, FINRA Rule 4210 frames the same mechanic on securities accounts with stricter thresholds. At least 25 percent of the market value of a position must stay available as maintenance margin, and a margin account cannot be opened with less than 2,000 USD of equity.

Things get tense when free margin runs out. Price moves against you, floating losses eat into the cushion, and the broker eventually flips into self-preservation mode. First a warning, then forced closures starting with the worst position, until used margin fits inside what remains. A margin call is not punishment. It is the broker refusing to let your loss become its problem.

Algorithmic strategies on Javlot are sized so used margin stays well below total equity. Headroom is the point. A strategy that needs its full margin to function has nowhere to go when conditions tighten.

Glossary entries are educational. They describe how a term is commonly used in automated forex investing, including on the Javlot platform. They are not a personalized recommendation and not a forecast. Past performance does not guarantee future results.