TradingIntermediate

Leverage

Exposure to an asset or position larger than the capital directly supporting it.

PLAIN-ENGLISH DEFINITION

In more detail

Leverage can arise from borrowing or derivatives. It amplifies losses as well as gains and can trigger forced liquidation under margin rules.

PUT IT IN CONTEXT

A practical example

A trader controls a position larger than their posted collateral.

Was this clear?

Got a clearer way to explain Leverage?

Add your perspective

Go to the source

Use the original reference to explore the details behind this entry.

Read the primary reference

Educational explanation based on the linked documentation. Protocol details can evolve. Sources & standards