Leverage Calculator
See the effective leverage of a position and the largest position your broker’s leverage allows.
Calculation Results
For education only. Not financial advice. Trading involves substantial risk of loss.
The leverage your broker offers and the leverage you actually use are different numbers. Enter your balance, your position value and your broker’s maximum leverage to see your effective leverage, the margin required and the price move that would wipe out your account.
The formulas
- Effective leverage = Position value ÷ Account balance
- Margin required = Position value ÷ Maximum leverage
- Maximum position = Account balance × Maximum leverage
- Move that wipes out the balance = Account balance ÷ Position value
Worked example
Balance $10,000, position value $50,000, broker maximum 30x:
- Effective leverage: 5x
- Margin required at 30x: $1,667
- Maximum position at 30x: $300,000
- Move that wipes out the balance: 20%
Double the position to $100,000 and effective leverage becomes 10x, so a 10% move against you would use up the whole balance.
Why effective leverage matters more
Your broker’s maximum tells you what is allowed. Effective leverage tells you how sensitive your account is to price. A trader with 500x available who holds 3x is far safer than a trader at 20x. The risk depends on position size relative to balance, together with your stop loss.
Guidelines, not rules
Many risk-conscious traders keep effective leverage low and rely on stop losses instead of hope. The right level depends on the market, the strategy and your stop distance, so test yours. The position size calculator sets size from your risk per trade, which keeps leverage in check automatically.
Common mistakes
- Treating maximum leverage as a target. Available margin is not an invitation to use it.
- Holding several positions. Effective leverage is the total of all open positions divided by balance.
- No stop loss. With leverage, one gap or spike can cause a loss larger than planned.
FAQ
What is a safe leverage ratio? There is no universal number. Lower is safer, and what you can tolerate depends on your stop distance and drawdown limit.
Is effective leverage the same as margin level? No. Margin level compares equity with used margin, while effective leverage compares position value with balance.
Related tools: Margin Calculator · Liquidation Price Calculator · Drawdown Recovery Calculator · All trading tools
Leveraged trading can result in losses greater than your deposit with some products. Not financial advice.
