What margin is
Margin is the part of your balance a broker sets aside while a leveraged position is open. It is a deposit, not a fee: it is released when the position closes, and the profit or loss is settled on top.
Leverage is the same idea written as a ratio. At 1:100 you put up 1% of the position's value; at 1:30, about 3.33%; at 1:400, 0.25%.
How margin is worked out
margin = lots × contract size × price ÷ leverage
One lot of EUR/USD is 100,000 euros. At 1.1236 that is US$112,360 of currency, and at 1:100 the margin is US$1,123.60, which is Ksh 145,955.64 in a KES account at the reference rate of 129.9KES to the US dollar (23 October 2026).
On USD/JPY the position is already counted in dollars, so the margin on one lot at 1:100 is US$1,000.00 whatever the price.
Gold is priced per ounce: a 100-ounce lot at the reference price of US$4,170 is US$417,000, so at the same leverage its margin is about 3.7 times that of a lot of EUR/USD. Brokers can set different leverage for each instrument, so check the margin terms for the one you trade.
Margin on one lot at different leverage
| Leverage | Margin rate | Margin (USD) | Margin (KES) |
|---|---|---|---|
| 1:10 | 10% | US$11,236.00 | Ksh 1,459,556.40 |
| 1:20 | 5% | US$5,618.00 | Ksh 729,778.20 |
| 1:30 | 3.33% | US$3,745.33 | Ksh 486,518.80 |
| 1:50 | 2% | US$2,247.20 | Ksh 291,911.28 |
| 1:100 | 1% | US$1,123.60 | Ksh 145,955.64 |
| 1:200 | 0.5% | US$561.80 | Ksh 72,977.82 |
| 1:400 | 0.25% | US$280.90 | Ksh 36,488.91 |
The higher the leverage, the less margin a position needs, and the faster a move against it eats that margin.
Leverage magnifies losses
Margin is not the most you can lose, and it is not a stop. The position gains and loses on its full value: a 1% move in EUR/USD changes one lot by about Ksh 145,955.64, which at 1:100 is 100% of the margin. At 1:400 the same 1% move is 400% of the margin.
When losses eat into the margin, a broker can ask for more funds (a margin call) and close positions automatically at its stop-out level, which turns a paper loss into a real one. Since September 2023 the CMA has required licensed brokers to disclose that stop-out level and to give clients negative balance protection, meant to stop losses exceeding your account funds (Circular No. 03/2023, paras. 6 and 7). Check your agreement: one broker we reviewed has terms that say otherwise. That protection comes with the CMA licence, so check which company holds your account.
Leverage magnifies losses as well as gains, and most retail accounts lose money trading these products. The position size calculator shows how size relates to a loss amount.
Leverage limits in Kenya
In Kenya, the Capital Markets Authority (CMA) licenses online forex brokers. The 2017 Regulations cap the leverage a licensed broker may offer at 400 times the client's deposit, so 1:400 is the ceiling (reg. 19(1), checked 23 October 2026), and the CMA can revise the ratio by circular. Your broker may offer less. Our CMA guide covers the licence.
The limit that applies is the one on the entity named in your client agreement. A broker group can run several entities under different regulators, each with its own leverage, so check which one opens your account. See Kenya regulation and the broker warning list.
Where to take this next
Margin is what a trade ties up; the size you choose decides what it can cost.
- Position size calculator, which sizes a trade from the loss you accept.
- Profit calculator, for what a move made or lost.
- Pip calculator, for what one pip is worth at any size.
- Best forex brokers in Kenya, regulation first, cost second.
- Broker reviews, for each broker's account terms.
- Kenya regulation, on who is licensed and for what.
This calculator is provided for education. Margin in another currency is converted at reference rates as of 23 October 2026, not live rates, so every figure is an estimate and not a quote, and your broker's own margin rules decide what it actually holds. The leverage choices are examples, not what any broker offers or any regulator allows. Leverage magnifies losses as well as gains, most retail accounts lose money trading these products, and nothing here is investment advice.
