Leverage is borrowed capital that multiplies the size of a position relative to the trader's own funds. It amplifies both gains and losses, and crucially it shrinks the distance to liquidation — so high leverage means a normal pullback can wipe out a position before the idea has time to work.
This term belongs to Market data & derivatives. See how it fits the bigger picture in Foundation, part of the free DEGEN ACADEMY — or watch it play out on the live terminal.
FAQ
What is Leverage?
Leverage is borrowed capital that multiplies the size of a position relative to the trader's own funds. It amplifies both gains and losses, and crucially it shrinks the distance to liquidation — so high leverage means a normal pullback can wipe out a position before the idea has time to work.