Margin vs capital explained

Margin is the amount of money a trader needs to deposit with a broker to open a leveraged position. It allows traders to control a larger position with a smaller amount of capital. Essentially, margin is borrowed money, increasing potential profits and losses.

Capital, on the other hand, refers to the total amount of funds a trader has available to invest or trade. It includes both the trader's own money and any borrowed funds. While capital represents the financial resources a trader owns, margin allows traders to leverage their capital and increase exposure to larger positions.