Trader Lab · Risk math
Leverage and margin, vocabulary that protects you
Leverage lets you control a larger notional with less deposited margin. It magnifies both gains and losses. Maximum leverage, margin call and stop-out levels depend on your broker entity and account, always read your agreement.
75%+ of retail investor accounts lose money trading CFDs.
Leverage in one sentence
If leverage is 1:30, $1,000 of margin can support roughly $30,000 of notional (simplified). Higher ratios mean smaller adverse moves can exhaust margin faster.
Margin, free margin, equity
- Used margin, collateral locked for open positions
- Equity, balance plus floating P/L
- Free margin, equity minus used margin
When equity falls relative to used margin, the platform may warn (margin call) or close positions (stop-out). Exact percentages are product-specific.
Entity caveat (important)
Retail leverage caps differ by regulator. The same brand can offer different maxima under different licences. Confirm the legal entity shown at signup on this site’s regulation / review pages.
Safer practice loop
Learn the terms here → size small on demo → only then consider live size. Pair this page with risk management.
FAQ
Does higher leverage mean higher profit?
It increases exposure. Outcomes can be larger losses just as easily. Leverage is not a skill shortcut.
What is a margin call?
A warning or restriction when your margin level drops below a broker-defined threshold. It is not a guarantee you still have time to fix the trade.