Leverage and margin

Borrowed power, magnified results

Members

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.

Watch this lesson with Tessa. The full video, worked example, calculator, quiz and Ask Tessa are part of Money Globe X Silver, Gold and Platinum. Create your account to start learning.

Next lesson: Liquidation

Educational information only - not financial advice.

Create your free account

Free lessons, live markets and the Classroom. Founding members get their first year at a founding price - applied automatically at checkout.

Offer terms