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What Is Leverage in Trading? | Borearis
Leverage lets you control a position larger than your deposit. It changes the margin, not the risk.
An example
One EUR/USD lot is 100,000 units. At 30:1 leverage you post about 3,617 dollars of margin instead of 108,500. A ten-pip move is still 100 dollars either way.
The trap
Higher leverage frees margin, so traders often take bigger positions. That is where the losses come from — position size, not leverage itself.
Rules
- Decide risk in money, then size the position.
- Never raise lots just because leverage is available.
- Check the broker's margin call and stop-out levels.
The margin calculator shows the deposit, and the position size calculator keeps the risk fixed.
Does leverage increase risk?
Not directly. Position size does. Leverage only changes how much margin is tied up.
What is a margin call?
The broker's warning that equity has fallen near the required margin level.
Educational content only, not investment advice.