Leverage and margin: what they really mean

Leverage lets you control a larger position with a smaller deposit, called margin. At 1:100 leverage, a $100,000 position needs $1,000 of margin.

Leverage works in both directions

A 1% move against a 1:100 leveraged position equals a loss roughly equal to your entire margin for that position. Higher leverage means smaller price moves can wipe out your funds.

Margin calls and stop-outs

• Margin level = equity ÷ used margin × 100%.
• If it falls to the margin-call level, you'll be warned to add funds or reduce positions.
• If it falls further to the stop-out level, positions are closed automatically, starting with the largest loss.

Maximum leverage depends on your jurisdiction, account type and the instrument. Lower leverage reduces the speed at which losses can grow.