All termsLeverage, Margin and CollateralStart here
Effective Leverage
Effective leverage describes the relationship between a trader's actual market exposure and the capital or equity supporting that exposure. It can differ from the maximum leverage selected or displayed by an exchange.
Why it matters to you
Selecting 20× leverage on an interface does not necessarily mean the trader's entire account is operating at 20× leverage. What matters for risk is the size of the actual position relative to the capital supporting it. Effective leverage gives a more useful picture of that relationship.
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