The total collateral currently tied up by open positions, equal to the sum of each position's margin requirement, and unavailable for anything else until they close.
Used margin is not a charge and it is not spent. It is ring-fenced inside your equity and released the moment a position closes. What it does cost you is flexibility, because every dollar locked is a dollar not counted in free-margin.
On a hedging account the treatment varies: some brokers charge full margin on both legs of an offsetting long and short, others charge on the larger side only. On a netting account under position-netting only the net position consumes margin.
Used margin is also the denominator of margin-level, which is what triggers a close-out, so adding positions tightens the noose in two directions at once.
Example: three open lots of EUR/USD at 30:1 with notional $108,400 each require $3,613 apiece, so used margin is $10,839. On $12,000 of equity almost everything is locked.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Margin and leverage. A $5,000 deposit can control a $100,000 position, which is 20:1 leverage. Because the loss is measured on the full $100,000, a 2.5% move against you halves the deposit and brings a margin call, and a 5% move uses all of it.
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