Leverage is the use of borrowed money or derivatives to control a position larger than your cash. It multiplies your exposure — turning small price moves into big gains, and big losses, on the money you actually put up.
Leverage lets you control a large position with a small amount of your own capital. Put up $1,000 at 10:1 leverage and you control $10,000 of exposure. The leverage ratio (2:1, 10:1, 50:1) tells you how much bigger your position is than your cash — and exactly how much the result is multiplied.
You can get leverage by borrowing through margin trading, or through built-in leverage in options, futures, and forex — instruments where a small deposit controls a much larger notional value. The crypto and forex games on this site mimic that leveraged feel.
At 10:1 leverage, a 1% move in the asset becomes a 10% swing in your account. That's wonderful on the way up and brutal on the way down — a 10% adverse move can wipe out your entire stake. High leverage is the single fastest way new traders blow up an account.
Experience it risk-free: the leveraged feel of fast P&L is best learned with play money. Try the crypto trading simulator and forex trading game where small moves swing your balance hard.
Not advice: educational content only. For authoritative basics see the SEC at investor.gov.
Related: margin trading, stock options, and risk vs reward.
Leverage means controlling a position larger than your own cash by borrowing money or using derivatives. It multiplies your exposure, so both gains and losses are magnified.
It means you control a position ten times the size of your own capital. A $1,000 deposit controls $10,000 of exposure, so a 1% price move becomes a 10% swing on your money.
Leverage is the concept of amplified exposure; margin is one way to get it — borrowing from your broker. Options and futures provide leverage in other built-in ways.
High leverage turns small adverse moves into large losses and can wipe out your entire stake. It is the fastest way inexperienced traders lose their capital.