Used margin

The sum of the margin requirements on every position an account holds open. Each position contributes its notional value multiplied by the margin requirement for that instrument, stated as a percentage of the full contract value and converted into the account currency. Requirements are set per instrument by the counterparty, not chosen by the account holder, and where an account mode offsets opposing positions in the same instrument the combined requirement can be lower than the two taken separately.

It is not a charge and not a cost. Nothing is deducted from equity when margin is used; the amount is ring fenced within it, cannot support a further position while it is held, and returns to free margin when the position closes. Its other role is as the denominator of the margin level, which is equity expressed as a percentage of used margin and is the ratio a close out is measured against.

Two things about it move without any decision being taken. A provider can raise the requirement on an instrument, commonly before a scheduled event or a market holiday, which increases used margin and lowers the margin level with no price having changed and no order having been sent. And on instruments whose requirement is recalculated against the current notional value, used margin drifts with the price of the position itself. Underneath both sits the reason the figure is watched: losses on the positions behind it are calculated on the full contract value and are not limited to the amount deposited, so the buffer between equity and the requirement is what stands between an account and the provider's close out rules. Favourable moves work in the same direction and to the same degree.