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Margin can be simply defined as the minimum amount of capital required by a broker to enter a trade. In order for traders to enter bigger trades, brokers require said traders to have a certain amount of capital available to hold onto as a form of collateral that can differ greatly according to the size of the trade and the asset being traded.

Leverage is usually interrupted as the actual purchasing power available to a trader at any time and, contrary to margins, comes in the form of a ratio. Leverage allows traders to enter trades worth much more than the money they invested, therefore, enabling them to amplify their returns and losses.
Even though margin is used to create leverage, they are very different from one another, which makes understanding how they differ crucial for when you’re looking for a broker that will help you trade better.