Futures, Leverage & Risk · Lesson 3
Leverage and margin
Borrowed power, magnified results
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In this lesson
Calculate position size from margin and leverage, and see how leverage magnifies both gains and losses.
Key takeaways
- Position size = margin × leverage.
- Your gain or loss on margin ≈ the price move × leverage — in both directions.
- The higher the leverage, the smaller the adverse move that liquidates you (about 100% ÷ leverage).
- Responsible use: low leverage, a stop-loss before liquidation, and ~1% account risk per trade.
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Next lesson: Liquidation
Educational information only - not financial advice.