What Is Margin Level?
Margin level is the percent ratio of your account equity to used margin. It helps you calculate how much money you have available for margin trading. The higher your margin level, the more cash you have on hand to trade.
What Is Equity?
How Is Margin Level Calculated?
Margin level is calculated as:
Margin level = (equity ÷ used margin)×100
If your account equity is $8,000 and your used margin is $2,000 then your margin level is 400%. Margin level is very important because it tracks your margin trading potential and the overall status of your open spot positions on margin. If it falls to 100% you will not be able to open new positions, and if it falls more, some of your spot positions on margin may be automatically closed (see "Margin Call Level" and "Margin Liquidation Level"). If your margin level is getting close to 100%, you can raise it, either by adding funds to your account to increase equity or by closing some open spot positions on margin to reduce used margin.