Margin is the amount of money you need to set aside to open and hold a leveraged trade.
Margin is the portion of your own funds required to open a position when using leverage. Rather than paying the full value of a trade, you put down a smaller deposit — the margin — while the rest of the position size is supported by leverage. Margin is not a fee; it is held as security while the trade is open. If the market moves against the position, more margin may be required to keep it open. Understanding margin is essential because it is directly tied to leverage and to how much risk a trader is really taking on.
Think of margin like a security deposit when renting an apartment. You don’t pay the full value of the property — you put down a deposit that’s held while you stay. Margin works similarly: it’s the amount set aside to hold a position open, not the full cost of the trade.
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