All termsLeverage, Margin and CollateralWorth knowing
Return on Equity (ROE)
In leveraged trading interfaces, return on equity, or ROE, commonly expresses a position's profit or loss relative to the capital or margin used for the calculation. The exact formula can vary between platforms.
Why it matters to you
Leverage can make ROE percentages look dramatically larger than the underlying market move. A displayed +50% ROE does not mean the underlying asset rose 50%. It may mean a much smaller price movement produced a large return relative to the margin supporting the position.
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