Leverage explainer
One position, four leverages, side by side. The table makes the point on its own: leverage changes the deposit and the buffer, never the position's risk per pip.
What the table means
Every row is the same trade. The notional never changes, so a 1% move against the position costs the same cash in every row - leverage does not touch that. What changes is the deposit the broker holds and therefore how far price can move before the account hits stop out.
The uncomfortable row is the highest leverage. It posts the smallest margin and survives the deepest move - and that is exactly why it is dangerous: the account can lose almost all of its balance before the broker steps in. Stop out is not protection; it is the floor hitting you. The table assumes a 100% margin-level stop out; brokers differ, so check yours.
Worked example
A $10,000 account opens a $50,000 position.
- At 10:1 the margin is $5,000; a 10% adverse move stops the account out, losing $5,000
- At 100:1 the margin is $500; the position survives a 19% move - and loses $9,500 when it finally stops out
More leverage did not make the position riskier per pip - it let the loss run five times deeper before anything stopped it. The unit test suite pins these exact figures.
Embed this explainer
Copy the snippet. The attribution link is part of the licence to embed - keep it visible.
<iframe src="https://ticksprout.com/tools/leverage-explainer?balance=10000¬ional=50000&embed=1" width="100%" height="700" style="border:0" title="Leverage explainer" loading="lazy"></iframe>
<a href="https://ticksprout.com/tools/leverage-explainer">Leverage explainer by Tick Sprout</a>Related tools
- Market hours and session clock
Which sessions are open now and when they overlap, in your timezone, DST handled.
13:00 UTC → London + New York open
- Pivot point calculator
Classic, Woodie, Camarilla and Fibonacci levels from yesterday's high, low and close.
H 1.0950 L 1.0900 C 1.0930 → pivot 1.0927
- Roll cost calculator
What moving a commodity position to the next contract month costs, per roll and per year.
8000 → 8020, 2 × £10, 4 rolls/yr → £1,600/yr