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Leverage calculator

The margin a position ties up at a given leverage, and the leverage a position implies for the margin you have, which are the same sum asked from two directions.

Leverage is presented as a feature and is better understood as a ratio you are choosing. A broker offering 1:500 is describing a ceiling, not an instruction.

What matters is effective leverage: your total exposure divided by your equity. That is the number that decides what a one per cent move does to the account.

account ccy

The full notional exposure.

: 1

30 means 1:30, the retail cap in several jurisdictions.

account ccy

Used for the effective leverage figure below.

Margin required$3,333.33
As a percent of the position
3.3%
Effective leverage on your equity
10:1
Exposure ÷ equity. This is the one that matters.
What a 1% move costs
$1,000.00
Against the whole position, not the margin.

A model, not a quote. Every figure here comes from what a broker publishes or what you type, and real fills, spreads and rates move.

The formula

Margin required
position value ÷ leverage
Margin percent
margin ÷ position value
Effective leverage
position value ÷ account equity
Effect of a 1% move
position value × 1%

How to use it

  1. Enter the position, not the marginThe whole exposure. Every consequence of leverage follows from this number and none of them follow from the margin.
  2. Set the leverage your broker appliesIt varies by instrument and by entity, 1:30 for retail forex in several jurisdictions, far higher offshore, and lower again on crypto.
  3. Add your equityThis is what turns a margin figure into an effective leverage figure, which is the useful one.
  4. Look at the last rowA 1% move against the position, expressed in money. If that number is uncomfortable, the position is too big regardless of what the margin requirement says.

The same margin, two very different positions

A $10,000 account holding a $40,000 position is running 4:1 effective leverage. A 1% move costs $400: 4% of the account. Recoverable.

The same account holding $600,000 is at 60:1. The margin at 1:500 would be only $1,200, so the account looks comfortably funded. A 1% move now costs $6,000, which is 60% of the account.

Nothing about the broker changed. The margin requirement was met in both cases. Only the exposure moved.

Margin is not a maximum loss

The margin figure is what the broker requires you to post to open the position. It is collateral, not a cap.

Losses are driven by the position and the market's movement, and they can exceed the margin, which is what negative balance protection exists to limit, where it applies.

Common questions

Is higher leverage more dangerous?

Available leverage is a ceiling. What is dangerous is high effective leverage, which is a choice about position size, a trader can hold 2:1 at a broker offering 1:500.

What is effective leverage?

Your actual exposure divided by your equity, as distinct from the maximum the broker permits. It is the only leverage figure that describes your account.

Why is retail leverage capped at 1:30 in some places?

Because regulators concluded that higher caps produced retail losses at a rate they were not willing to accept. Offshore entities of the same brand frequently offer far more.

Does more margin mean a safer position?

Posting more margin lowers effective leverage for a given position, which does reduce risk. Meeting a lower margin requirement on a larger position does the opposite.

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