Free Margin

Free margin, also called usable or available margin, is the portion of account equity not tied up as collateral for open positions. It is calculated as equity minus used margin, which means it moves in real time with floating profit and loss: unrealised gains increase free margin, unrealised losses reduce it even though no trade has closed. Free margin is what a trader can commit to new positions and, more importantly, the buffer that absorbs adverse price movement before margin warnings begin. When it approaches zero the platform will refuse new orders, and continued losses push the account toward a margin call and eventually automatic closure at the broker's stop-out level.