Exposure versus balance
Leverage allows control of a position larger than the account balance. Margin is the portion of equity reserved against that position.
Higher leverage does not improve a strategy. It only increases the account impact of each price movement.
Key takeaways
- Leverage scales both gains and losses
- Margin is reserved, not spent
- Insufficient equity can trigger automatic closure
Trading leveraged products carries significant risk. This content is educational and is not financial advice.