Definition of Initial Margin
The minimum amount of capital required to open a leveraged position. Calculated based on the position size and the leverage ratio offered by the broker.
At a glance
Term
Initial Margin
URL slug
initial-margin
Category
Risk & capital
Short answer
The minimum amount of capital required to open a leveraged position.
Deep dives
/guide/what-is-margin/, /guide/what-is-leverage/, /tools/lot-calculator/
Example
Example: $1,000 equity and 1% risk = a $10 cash cap. Size from “Initial Margin” and stop distance, not from a gut-feel lot size.
Common mistake
Common mistake: confusing “Initial Margin” with advertised max leverage — leverage alone does not set risk per trade.
Professional tip
Tip: write a cash daily loss limit independent of “Initial Margin”, then let the definition set size only inside that ceiling.
Related deep dives
Practice tools:
Related terms
FAQ
The minimum amount of capital required to open a leveraged position.
“Initial Margin” sits inside capital protection. Ignoring it turns leverage and margin from tools into a path to rapid loss.
Common mistake: confusing “Initial Margin” with advertised max leverage — leverage alone does not set risk per trade.