Free Margin & Purchasing Power Calculator
Calculate available unencumbered equity, usable margin capacity, and additional position purchasing power.
Defining Free Margin and Unencumbered Equity
Free Margin (also called Available Margin or Usable Margin) represents the portion of account equity not currently locked up as collateral for open positions. It serves as your financial cushion against floating losses and determines your capacity to open additional trade positions.
Free Margin and Purchasing Power Mathematics
Equity = Balance + Floating PnL. Free Margin = Equity − Used Margin. Free Margin % = (Free Margin ÷ Equity) × 100. Maximum Additional Purchasing Power ($) = Free Margin × Broker Leverage. Maximum New Lots = Purchasing Power ($) ÷ (100,000 × Exchange Rate).
How to Use This Free Margin Calculator
Input your account balance, current floating PnL, used margin, broker leverage, and asset price. The calculator details exact dollar free margin, percentage usable equity, maximum dollar purchasing power, maximum additional Forex lots, and stress-test loss scenarios.
Managing Free Margin During Market Volatility
Exhausting free margin restricts trade flexibility—preventing you from hedging existing positions or opening high-probability new setups. Maintaining at least 50% free margin ensures operational freedom during market swings.
Frequently Asked Questions
Can free margin be negative?
Yes, if floating losses exceed the difference between balance and used margin, free margin becomes negative, disabling new orders.
What happens if free margin reaches zero?
When free margin drops to zero, your broker will reject all requests to open new positions until equity increases or existing trades are closed.
Does opening a new trade reduce free margin?
Yes, opening a trade moves required collateral into Used Margin, directly reducing Free Margin by that amount.
How does high leverage affect free margin?
Higher leverage requires less used margin per lot, leaving a larger portion of equity in Free Margin.
Is free margin the same as account balance?
No, balance only changes when positions are closed, while free margin updates in real time with floating PnL and used margin.