Used margin is the portion of your trading account balance currently locked up as collateral to keep your open positions active. When you trade forex on leverage, your broker requires you to set aside a specific amount of funds for each trade—this is your used margin. It acts like a security deposit: the broker holds it to guarantee you can cover potential losses.
As you open more positions or increase trade sizes, your used margin rises. Once you close a position, that margin is released back into your available balance.
Your account equity minus used margin equals your free margin, which determines how much buying power you have left to open additional positions. The deposit requirement set by your broker varies depending on the currency pair and your account's leverage ratio.
In short: Used margin is the collateral your broker reserves from your account to maintain your active trades.
Example in Action
You open your first trade on EUR/ZAR, buying 10,000 units at 20.00 ZAR per euro with a 5% margin requirement. This position requires 10,000 ZAR in used margin (10,000 × 20.00 × 0.05).
You then open a second trade on USD/ZAR, buying 5,000 units at 18.00 ZAR per dollar with the same 5% margin requirement, which adds 4,500 ZAR in used margin.
Your total used margin is now 14,500 ZAR, meaning this amount is locked as collateral and cannot be used to open new positions until you close one or both trades. Your account balance reflects only the funds from closed positions and does not include the floating profit or loss from these open trades. If your account equity falls below the required margin level, you may face a margin call where your broker requests additional funds or automatically closes positions.
Why It Matters
Understanding used margin isn't optional for African traders—it's the difference between staying in the game and watching a broker force-close positions at the worst possible moment.
Used margin separates traders who survive volatility from those who lose everything to forced liquidations they never saw coming.
It determines how much firepower remains for new trades.
It triggers margin calls when equity drops too low.
It's how brokers decide whether to liquidate everything.
Ignore it, and the market will teach that lesson the hard way.
Common Questions
How Does Used Margin Affect My Ability to Trade Multiple Currency Pairs Simultaneously?
As used margin increases with each open position, free margin shrinks, restricting capital available for additional trades. African traders must monitor margin levels closely, as excessive used margin across multiple pairs heightens margin call risk and limits trading flexibility.
Can Brokers Change Used Margin Requirements During Volatile African Market Sessions?
Yes, brokers frequently adjust used margin requirements in real time during volatile African market sessions, responding to heightened risk, liquidity drops, and currency fluctuations—often without prior notice, increasing unpredictability for traders across the continent.
What Happens to Used Margin When My Internet Disconnects in Remote Areas?
Used margin remains locked for open positions during disconnection, with broker servers continuing to monitor equity levels. Stop-outs trigger automatically if maintenance margin is breached, even while the trader stays offline without access or control.
Do Nigerian Naira or Kenyan Shilling Accounts Calculate Used Margin Differently?
No, Nigerian Naira and Kenyan Shilling accounts apply the same used margin formula as other currencies. The only difference is the exchange rate conversion applied when translating margin requirements into the account's base currency.
Will Mobile Money Deposit Delays Impact My Used Margin and Open Positions?
Yes. Mobile money deposit delays prevent timely margin top-ups, leaving open positions vulnerable to margin calls and forced liquidation during the lag period—often two to ten days across African markets—before funds reach the trading account.
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