Usable margin (also called free margin) is the capital available to open new positions, calculated as your account equity minus the margin currently used to maintain open trades. It acts as a buffer against margin calls.
How Usable Margin Works
When you open a position, your broker reserves margin from your account. The remainder is usable margin. For example, with $10,000 equity and $2,000 reserved for open trades, you have $8,000 usable margin.
The calculation is simple:
Usable Margin = Account Equity − Margin Used
Why Usable Margin Matters for Your Trading
Your usable margin determines two things: how much you can trade, and how much loss you can absorb before a margin call. Leverage amplifies this risk—higher leverage consumes more usable margin per trade, leaving less cushion. If your usable margin falls below your broker's threshold, you'll face a margin call, forcing you to deposit funds or close positions.
Monitoring usable margin is core to position sizing and avoiding forced liquidation when the market moves against you.
