What Is ‘Free Margin’ in a Trading Account?
Free margin, also known as usable margin, is the amount of equity in a margin account that is not currently being used as collateral for open positions. It represents the available capital that a trader can use to open new positions or absorb losses on existing ones.
It is calculated as: Free Margin = Equity – Used Margin. When the free margin approaches zero, the trader is highly leveraged and at greater risk of a margin call.
