Margin & leverage
Margin funds a position; leverage magnifies its movement
Margin is collateral or borrowed funding used to establish and maintain an exposure. Leverage is the relationship between economic exposure and the investor’s own capital. Rules differ across securities, options, futures and account types.
Explainer Reviewed 08-21-2026
What it is for
The distinction helps a reader look beyond cash paid and measure the full exposure that can gain or lose value. Maintenance requirements, interest, variation margin and broker house rules can change the amount of capital a position requires.
What it cannot tell you
Leverage does not improve the odds of a trade; it magnifies outcomes and can force liquidation. A broker may impose stricter requirements than regulatory minimums. Losses can exceed an initial deposit in some products.
How to verify the object
Read the broker’s margin agreement, current house requirements and product-specific disclosure. Calculate exposure, available equity and the effect of an adverse move before considering the position. Recheck requirements because they can change.