Understand exposure, initial margin, and how leverage changes risk.

Leverage lets you control a larger position with less capital. That can improve capital efficiency, but it also magnifies risk. The margin and leverage calculator shows the true exposure behind a trade so you can make decisions based on real numbers, not just the leverage label.

Exposure vs margin

Exposure (or notional) is the full value of the position. Margin is the capital you must commit to open it. If you open a $10,000 position at 10x leverage, the initial margin is roughly $1,000. Fees and funding costs reduce that buffer over time.

Why leverage feels misleading

A leverage number alone hides the size of the trade. A 20x position on a volatile asset can behave like a much larger trade than you expect. That is why calculating exposure first is critical.

How to use the calculator

You can start from either:

• Entry price + quantity
• Notional size

Then choose a leverage value. The calculator outputs:

• Exposure
• Initial margin
• Estimated fees
• Optional liquidation approximation (if maintenance margin is provided)

Liquidation is only an approximation

Liquidation rules vary by exchange, contract type, and account mode. The calculator provides an approximation if you enter a maintenance margin percentage. It should be treated as a warning, not a guarantee. Always check your exchange rules.

Practical example

Assume you buy 0.25 BTC at 40,000:

• Exposure = 0.25 × 40,000 = $10,000
• At 10x leverage, initial margin ≈ $1,000

If your exchange charges 0.04% fees on entry and exit, the total fees are roughly $8. That is small compared to margin, but it adds up over many trades.

How leverage impacts risk

Leverage does not change the stop distance or the loss per unit. It changes how much capital is tied up. That can be useful, but it also makes it easier to open a position that is too large.

A safer workflow is: 1. Calculate the position size based on stop distance. 2. Check exposure and margin with this calculator. 3. Reduce size if margin or liquidation risk is too high.

Common mistakes

• Choosing a leverage number first instead of sizing the trade.
• Ignoring maintenance margin and liquidation buffers.
• Assuming one exchange's liquidation rules apply to all venues.
• Overlooking fees and funding costs on longer holds.

Key takeaways

• Exposure is the full position size; margin is just the required capital.
• Leverage multiplies exposure, not skill.
• Liquidation calculations are exchange-specific and approximate here.
• Use leverage only after you size the trade properly.

Use the calculator to compare leverage levels and confirm you are trading within your risk limits.