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Exposure

Exposure describes how much an investment or trading position is affected by movements in a particular market, asset or source of risk. In perpetual futures, leverage can create market exposure significantly larger than the amount of capital committed as margin.

Why it matters to you

Account balance alone does not tell you how much market risk you are taking. A trader with $5,000 in an account could have $2,000, $5,000 or $25,000 of market exposure depending on the positions being held. Understanding exposure is fundamental to understanding risk.

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