Leverage Calculator
Margin, notional and leverage — enter two, get the third
Solve for
Fill in the two fields that stay enabled; the third is calculated.
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Margin, notional and leverage
These three numbers are one relationship seen from different angles. Fix any two and the third is determined:
leverage = notional ÷ margin
margin = notional ÷ leverage
notional = margin × leveragePost $500 against a $10,000 position and you are at 20x. The exchange is effectively fronting the other $9,500; your $500 is the buffer that absorbs losses, which is exactly why the position gets closed when losses approach it.
Leverage does not change your loss — it changes your room
This is the most misunderstood point in leveraged trading. If you hold a $10,000 position and price moves 2% against you, you lose $200. That is true at 5x, at 20x, at 100x. Leverage did not change it.
What leverage changed is how much of your margin that $200 represents. At 5x you posted $2,000, so it is 10% of your margin. At 20x you posted $500, so it is 40%. At 100x you posted $100 — the loss is twice your margin and you were liquidated well before reaching it. Higher leverage does not make you lose more per point of price movement; it makes you run out of buffer sooner.
Effective leverage is the number that matters
Per-position leverage is what you set in the order ticket. Effective leverage is total notional across every open position divided by your account equity — and in cross-margin mode that is what actually determines your liquidation risk.
Three positions at "only 5x each" on a $2,000 account, $10,000 notional apiece, is $30,000 against $2,000: 15x effective. Every one of those positions is exposed to the others through a shared margin pool, so a loss on any of them pulls the rest closer to liquidation. Enter your account equity above to see this number.
Choosing a leverage
Work backwards, not forwards. Decide your stop first, then pick the largest leverage that still leaves liquidation comfortably beyond it — roughly twice the stop distance is a reasonable buffer. Setting leverage first and discovering where liquidation landed is how correct trades get closed by the exchange. The position size calculator does this ordering for you and warns when liquidation sits inside your stop.
Frequently asked questions
How does leverage work?
Leverage is the ratio of position notional to the margin backing it. Post $1,000 of margin against a $10,000 position and you are at 10x. The exchange lends the difference; your margin absorbs the losses, which is why the position closes when losses approach your margin.
What is effective leverage?
The leverage across your whole account rather than one position: total notional of all open positions divided by total account equity. Three separate 5x positions can add up to 15x effective leverage, which is the number that actually determines your liquidation risk in cross-margin mode.
How much margin do I need?
Margin = notional / leverage. A $10,000 position at 20x needs $500. That is the initial requirement — you also need buffer above it, because a position sitting at exactly the minimum is one small adverse move from liquidation.
Is higher leverage riskier?
Higher leverage does not change your loss on a fixed stop, but it moves your liquidation price much closer to entry — so the market has less room to breathe before the exchange closes you. The practical risk of high leverage is being liquidated by noise on a trade whose thesis was correct.