Leverage

Moving more money than you actually have

In detail

Borrowed money or margin lets you trade a multiple of your own funds. The gain when prices rise and the loss when they fall are magnified by the same multiple. If the loss eats through the margin, more money is demanded.

Example

Trading $10,000 at three times leverage loses $3,000 on a 10% fall.

Related terms

Margin trading FX margin trading Open position

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For learning, not investment advice. Decisions are your own.