what is leverage?

controlling a position larger than the money you put up (the margin).

hypothetical: with 5x, $400 of margin controls a $2,000 position. it does not change what a planned stop loses as long as the stop is hit before liquidation, but it makes oversizing easy, and fees and funding still eat into the margin.

related words

slippage the difference between the price you expected and the price you actually got.
margin the money posted to open and hold a leveraged position.
stop-limit order a stop that turns into a limit order when triggered.

part of the topic risk: free articles, more words and the guide.

checked 2026-10-20. education, not advice. found a mistake? see corrections.