Margin Utilization = (Used Margin ÷ Account Equity) × 100
Example:
Account Equity = $10,000
Used Margin = $2,000
Utilization = (2,000 ÷ 10,000) × 100 = 20%
High utilization reduces free margin and increases the risk of forced closures. Aim to keep it well below Pipstone’s limits, especially with higher leverage or multiple open positions.
