Leverage

The idea

Exposure larger than posted capital amplifies gains and losses.

Try the scenario

A 5% move against five-times exposure consumes about 25% of equity before costs.

Check your understanding

Which statement is supported by this definition?

• Leverage reduces the loss of the underlying position.
• Exposure larger than posted capital amplifies gains and losses.
• This concept guarantees the next five candles.

Think through the example before checking your answer in the game. Verified player accounts can save lesson mastery and earn knowledge XP.