Risk management · Glossary
Leverage
Exposure created using a smaller amount of margin than the position's notional value.
Definition and explanation
Leverage describes the relationship between position notional value and the margin supporting that position. It can amplify gains and losses relative to the margin committed. Actual risk also depends on position size, maintenance margin, fees, funding and the venue's liquidation rules.
Example
A $1,000 notional position supported by $100 of initial margin represents 10x leverage before fees and other adjustments.
Educational information only. Trading terms and contract mechanics can vary by venue and market. Verify the rules of the provider you use.