Brokers & Accounts
Beginner
Free Margin
Also called: available margin
The portion of account equity not currently tied up as margin for open positions — available to open new trades.
Definition
Free margin = Equity − Used margin. As open trades go in/out of profit, free margin breathes accordingly. When free margin hits zero, no new trades can open; when used margin exceeds equity, margin call territory.
Formula
Free Margin = Equity − Used Margin