Glossary / Glossary term
Leverage
Leverage is the position value divided by the margin it uses; a cap limits how large a position can be for the equity in the account.
Leverage lets a position be larger than the margin set aside for it: the position's value divided by the margin is its leverage. Gains and losses follow the full position, not the margin.
The caps here
Leverage is capped at 5x on BTC and ETH and 3x on SOL, or the symbol's own cap if that is lower. An order that would take the account past the cap is refused.
Leverage and the loss limits
Leverage does not change the floors. On a Classic 1-Step 10K account the daily room is $400 at any leverage; a larger position simply uses it up with a smaller price move. The position size calculator shows the notional, the margin and the share of the day's room for a given entry and stop.
Related
- LiquidationLiquidation is the forced closing of positions when equity falls to the maintenance margin; in a challenge, the loss floors normally come first.
- Perpetual futures in a prop challenge: leverage, funding and liquidationHow perpetual futures work in a simulated prop account: mark price, margin and leverage caps, funding, fees, and why a breach comes before liquidation.
- Position size calculator