Leverage Calculator
Calculate trading leverage, position value and estimated margin requirements. Use the free EZTradingHub Leverage Calculator to understand how leverage changes the amount of capital required to control a trading position.
Calculate Your Trading Leverage
Enter your account equity, position size and leverage to estimate the position value and required margin.
What Is Trading Leverage?
Trading leverage allows a trader to control a position with a market value that is larger than the amount of capital committed as margin.
Leverage is commonly expressed as a ratio such as 1:10, 1:50, 1:100 or 1:500. The ratio describes the relationship between the position's notional value and the capital required as margin under the simplified calculation used by this tool.
Leverage can increase the amount of market exposure available to a trader, but it does not eliminate the possibility of losses. Losses are determined by the position's exposure and price movement.
How to Calculate Leverage
A simplified effective leverage calculation can be expressed as:
For example, if a trader has $1,000 in account equity and controls a $100,000 position:
Effective Leverage = 1:100
How Leverage Affects Required Margin
Under a simplified margin model, required margin can be estimated by dividing position value by the leverage ratio.
For example, a $100,000 position at 1:100 leverage would require approximately $1,000 of margin under this simplified calculation.
Actual broker margin requirements can differ depending on the instrument, contract size, current price, account currency, broker rules, leverage tiers and other conditions.
Leverage and Example Margin Requirements
| Leverage | Approx. Margin | Example Position |
|---|---|---|
| 1:10 | 10% | $10,000 |
| 1:20 | 5% | $10,000 |
| 1:50 | 2% | $10,000 |
| 1:100 | 1% | $10,000 |
| 1:200 | 0.5% | $10,000 |
| 1:500 | 0.2% | $10,000 |
These figures are simplified examples. Actual margin requirements may vary by broker and financial instrument.
Leverage vs Trading Risk
Leverage and trading risk are related, but they are not the same thing.
Leverage determines how much market exposure can be controlled relative to the capital used as margin. Trading risk depends on factors such as position size, entry price, stop-loss distance, instrument volatility and the amount of capital exposed to a potential loss.
Increasing available leverage does not automatically mean a trader must use more leverage. Position sizing and risk management remain important when trading leveraged products.
Leverage for Forex, Gold and Crypto Trading
Leverage is commonly encountered in Forex and CFD trading and may also be available for certain cryptocurrency and other derivative products.
The exact leverage available can depend on the broker, instrument, jurisdiction, account type, regulatory requirements and other conditions.
Gold such as XAUUSD can have instrument-specific contract and margin requirements. Cryptocurrency derivatives can also have different margin rules, liquidation mechanisms and leverage limits.
How to Use the EZTradingHub Leverage Calculator
- Enter your account equity.
- Enter the total position value.
- Select your leverage ratio.
- Enter custom leverage if your broker uses a ratio not listed in the selector.
- Click Calculate Leverage.
- Review the effective leverage and estimated margin.
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Leverage Calculator FAQ
Financial Disclaimer: EZTradingHub provides calculators and educational information for general informational purposes only. Nothing on this page constitutes personalized financial, investment or trading advice.
Trading Forex, CFDs, cryptocurrencies, commodities, stocks and other financial instruments involves substantial risk of loss. The calculations on this page are simplified estimates and may not reflect your broker's exact margin, leverage, contract-size or liquidation requirements.
Always verify important calculations with your broker or another appropriate professional source before making financial decisions.