GLOSSARY · CONTRACTS & MONEY
What is Leverage?
Leverage is controlling a large position with a small amount of capital.
Because futures only require margin, a small account can control a large notional position. That magnifies gains and losses equally.
Professional futures traders manage leverage through position size and stop placement — never by how much margin is available.
EXAMPLE
Controlling $250,000 of ES with a $25,000 account is 10:1 leverage. A 1% move against you is a 10% account drawdown.
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