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Leverage & Margin | Austex Markets
TRADING CONDITIONS · LEVERAGE & MARGIN

Leverage & Margin — Capital Efficiency and Risk, Explained

Understand leverage, margin, margin call and stop-out mechanics so you can use leverage to your advantage while managing risk responsibly.

Essential Terms for Leveraged Trading

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Leverage

Leverage lets you control a larger position with relatively little capital of your own, magnifying both potential gains and potential losses.
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Margin

Margin is the capital locked to open a position — it is not a trading fee. The amount required is determined by position size and leverage ratio.
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Free Margin

Your account equity minus used margin — available to absorb floating losses or open new positions. The higher the proportion of free margin, the safer your account.
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Margin Call

When your margin level falls to a warning threshold, the system will prompt you to add funds or reduce your position to avoid being stopped out.
Before you start trading with leverage, it's worth understanding these core concepts to help manage risk more effectively.
Margin Calculation Example
WORKED EXAMPLE

Margin Calculation Example

Suppose you want to trade 1 standard lot (100,000 units) of AUDUSD at 400:1 leverage:

  • Required margin = contract size ÷ leverage ratio = 100,000 ÷ 400 = 250 (account base currency)
  • The higher the leverage, the lower the required margin, and the greater your capital efficiency
  • Leverage magnifies both gains and losses — size your positions in line with your risk tolerance

Margin Call & Stop Out Mechanics

To help protect against a negative account balance, Austex Markets applies margin call and stop-out mechanisms. Exact trigger levels are governed by MT5 account settings.

 

Mechanism Trigger Condition Description
Margin Call 150% When your margin level falls to a warning threshold, the system alerts you to add funds or proactively reduce your position.
Stop Out 50% If your margin level falls further to the stop-out threshold, the system will automatically close positions to control risk.

* Exact margin call and stop-out levels are governed by MT5 account terms and may vary by account type — please refer to your account terms.

Use Leverage Wisely — Trade Responsibly

Before trading live, we recommend using a demo account to get comfortable with leverage and margin mechanics.