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Futures, Leverage & Risk · Lesson 3

Leverage and margin

Borrowed power, magnified results

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Leverage and margin

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.

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