Risk Academy
Your balance says $1,000. Your free margin says $537.92.
Five numbers sit at the top of every MetaTrader account and most traders read only the first one. They are not five opinions about your account. They are one number and four things derived from it, and the gap between the first and the fifth is the whole subject.
- Balance
- 1,000.00
- Open P/L
- -300.00
- Equity
- 700.00
- Margin
- 162.08
- Free margin
- 537.92
- Margin level
- 431.89%
Where the money went
Nothing was spent and nothing disappeared. Three steps separate the balance from the free margin, and each one is a subtraction you can do in your head.
1,000.00 − 300.00
= 700.00 equity
Balance counts closed trades. This position is still open, so its −$300 does not touch the balance at all. It lands on equity, which is what the account is actually worth if everything closed right now.
700.00 − 162.08
= 537.92 free margin
The broker holds $162.08 against the open position. It is not a cost and it is not gone: it is unavailable until the position closes, at which point it returns. What is left is what you can still use.
700.00 ÷ 162.08 × 100
= 431.89% margin level
Equity measured against the margin being held. This is the number the broker watches, not your balance and not your profit.
The five, in one line each
- Balance. Closed trades only. It does not move while a position is open.
- Open P/L. The floating result of positions that are still open.
- Equity. Balance plus open P/L. What the account is worth right now.
- Margin. Held to keep the position open. Not a fee, not a loss. Released on close.
- Free margin. Equity minus margin. What is left to open anything else.
- Margin level. Equity divided by margin. The number your broker watches.
The short version, and the one worth memorising: balance is what you had, equity is what you have now, and free margin is what you can still use.
Why the margin was only $162
One bitcoin at 81,040.93 is an exposure of about $81,000, held on an account with $1,000 in it. That is possible only because this account runs 1:500 on that symbol:
81,040.93 ÷ 500
= 162.08 margin
Two things follow from that, and both matter more than the definitions above. Margin is calculated from the price you opened at, which is why it stays at 162.08 while the market moves and only the rows below it change. And a small margin figure is not a small position: the exposure here is eighty times the account. Most brokers allow nothing like 1:500 on crypto, and many regulators cap it far lower, so read the leverage for the symbol you are trading rather than the headline number on the website.
What that leverage actually does to a position is a separate subject, and it is the one that decides whether an ordinary day is a scratch or the end of the account: leverage risk explained.
Margin call and stop-out
Margin level is the number that ends accounts, and it ends them without asking. As losses grow, equity falls while the margin being held stays where it is, so the percentage falls. Two thresholds sit below you:
- Margin call. A warning level. You can usually still close positions yourself, and on most platforms you can no longer open new ones.
- Stop-out. The broker closes positions for you, usually the largest loser first, until the level recovers. It is automatic, it does not wait for you, and the fills are whatever the market is offering at that moment.
We publish no threshold numbers here, on purpose.
Both levels are set by the broker, they differ between brokers, and they differ between account types at the same broker. A figure quoted on a site like this one would be a figure for somebody else's account. Yours is in your broker's contract specifications or account terms, it is usually two percentages, and it is worth knowing before you need it rather than after. The account above sits at 431.89%, which is comfortable; comfort at 431% tells you nothing about where the floor is.
What to do with this
- Read equity, not balance. Balance is history; equity is the account. A screen showing a healthy balance and a collapsing equity is an account in trouble.
- Treat free margin as the real cash, and then do not spend all of it. It is what is available, which is not the same as what is sensible.
- Find your margin call and stop-out levels today, and write them down next to your account size.
- Check the leverage for the symbol, not the broker. It varies by instrument, and crypto, gold and indices are usually nothing like the forex headline.
Size the position before you open it
Educational content only, not financial advice. The figures above come from one live account and are an example rather than a standard. Leverage, margin requirements, margin call and stop-out all vary by broker, by account type and by instrument.