What Is Margin Level? Formula and Stop Out Levels

Margin level is account equity divided by the margin locked up by open positions, expressed as a percentage. It is the number a broker watches to decide whether your positions are still adequately funded; below published thresholds the platform warns you, then closes positions for you.

How it works

Equity       = Balance + floating P&L of open positions
Used margin  = Σ (position size × contract size × price) ÷ leverage
Margin level = (Equity ÷ Used margin) × 100
Free margin  = Equity − Used margin

500% means equity is five times the collateral in use; 100% means it exactly equals it. Below that the account is funding positions it can no longer cover.

Worked example: a $10,000 account opens 5 lots of EUR/USD at 1:100 leverage. Used margin is about $5,400, margin level starts at 185%, and one pip on that size is $50.

A 146-pip move, routine on EUR/USD in a news week, takes that account from apparently comfortable to liquidated at the broker's thresholds — typically 100% and 50%, but always set in the contract rather than by any universal standard.

Why it collapses fastest when you are already losing. With size held constant the ratio falls in a straight line, but four things break that assumption at exactly the wrong moment:

• The denominator does not shrink with you. Used margin is frozen at the size you opened, so every dollar of floating loss comes off the numerator alone.
• Losing traders add size. Averaging down, grid and martingale systems open more positions as price moves against them: equity falls while used margin rises, so the ratio drops non-linearly.
• Margin requirements rise in volatility. Brokers cut leverage before major releases and weekends. Used margin increases on positions you never touched, with no price move at all.
• Spreads widen with the loss. Equity is marked at the price that would close the position, so a spread blowout reprices the whole book at once.

Why it matters

Margin level converts an unrealised loss into a forced, realised one at the worst point of the move — the mechanism behind a margin call. It also reframes sizing: opening a position is choosing how much price movement the account can absorb before someone else takes over the exits, and that buffer, in pips, is knowable before you click.

What the data shows

Across the public accounts on ShowMyTrades with trading history (August 2026), the median deepest drawdown is 9.7%, but 17.6% have passed 50%. These are accounts published here, not traders in general.

Hold that 50% against the ratio. Margin level scales with equity: an account at a comfortable-looking 200% is already at 100% — the usual call threshold — once equity has halved, and reaching a 50% stop out takes a fall of roughly three quarters. Falls past half are about one published account in six.

The gap between the two published drawdown figures tells the rest. Drawdown is measured on equity and includes floating losses; DD on Balance counts closed results only. A first figure far larger than the second means the account carried deep unrealised losses — another way of saying its margin level was low.

Where you see it on ShowMyTrades

Used margin is not published, so no account page carries a margin-level gauge. The numerator and the two variables behind the denominator are all visible.

• Balance and Equity, the two rows immediately below DD on Balance in the Account Stats panel, where Equity carries its own percentage in brackets — equity as a share of balance. Well under 100% is an account holding floating losses right now, its margin level falling with them.
• The leverage badge in the account header, beside the broker and the account currency: it divides the notional value of every position, fixing the denominator before the first order.
• The Volume column in the trades table, in lots, which is the other half of used margin. Several tickets open at once on large volume means a large denominator against the same equity.
• Highest $, the peak balance on the row directly under Equity, showing how far equity now sits below the account's own best.

Common misunderstandings

• "Margin level is my leverage." Related but not the same. Leverage is set per instrument and determines used margin; margin level is a live ratio that changes on every tick.
• "1,000% is safe." It is safe for that position set. Open four more of the same size and the same equity covers five times the collateral.
• "Free margin is money I can withdraw." It is unencumbered equity, including floating profit that has not been realised and can disappear.
• "Closing one position fixes it." Not proportionally. Closing the largest releases the most margin and lifts the ratio fastest; closing the smallest may not lift it above the threshold at all. Which one the platform picks at a stop out is not your choice.

For how equity, balance and drawdown read together, see how to read a trading account dashboard.

Related terms