ToolsCalculator

Leverage calculator: how far can the price move before your margin is gone?

Enter your margin, the leverage, an entry and exit price and the direction. The calculator shows the size of the bet you are really making and how small a move can erase your money.

By the Bitfolio Explainer Desk · Checked against primary sources · 5 min read

Education only, not investment, tax or legal advice. Crypto-assets are high-risk — risk disclosure.

Rows of trading desks with multiple screens on a large bank trading floor — Photo: “RBC's trading floor” by ralvin, CC BY 2.0, via flickr.com · Edited: duotone, cropped.

The short answer

Leverage multiplies your position, and every gain or loss, by the leverage factor. With $500 at 10× you control $5,000, so a 5% drop costs $250, half your margin. A 10% drop erases it, and platforms usually close the position earlier.

Key takeaways

Position size = margin × leverage; profit or loss is measured on the full position.
The move that wipes out your margin is roughly 100% ÷ leverage: 10% at 10×, 2% at 50×.
Maintenance margin rules and fees mean you are usually closed out before that point.
Regulators warn that leveraged traders can lose more than they deposit.

How do you use the leverage calculator?

Five inputs

1
Margin
The collateral you put up: the money at risk.
2
Leverage
How many times your margin the position is worth. 10× means $1 of margin controls $10 of exposure.
3
Entry and exit price
Where you open and close, or a price to test.
4
Direction
Long profits if the price rises; short profits if it falls.
5
Read the results
Position size, profit or loss before fees, return on margin and the move that would erase it.

Figure · Same $500, same 5% drop

No leverage (1×)

$500 of exposure
5% drop costs $25
Margin gone only at a price of 0

10× leverage

$5,000 of exposure
5% drop costs $250
Margin gone after a 10% drop

Illustrative, computed with the calculator's formula.

What formula does the calculator use?

Position size = margin × leverage
Units = position size ÷ entry price
Profit or loss = (exit − entry) × units for a long, and the same with the sign flipped for a short
Return on margin = profit or loss ÷ margin × 100
Move that erases all margin = 100% ÷ leverage

The CFTC explains that margined traders fund only a fraction of the underlying value, and that this leverage amplifies risk¹. Its forex advisory gives an example: a 2% margin requirement lets $2,000 open a $100,000 position², which is 50× leverage. At 50×, a 2% move against you equals your entire margin.

Worked example: a 5% drop at 10× leverage

Worked example

$500 margin, 10× long, price falls from $2,000 to $1,900 (illustrative)

Position size: $500 × 10 = $5,000.00, or 2.5 units at $2,000.

The price falls 5% to $1,900. Loss: ($1,900 − $2,000) × 2.5 = −$250.00, a return of −50.00% on your margin. A 10% fall would erase the full $500. Had you gone short instead, the same move would have gained $250.00, before fees.

$500 of margin, a 5% price drop, different leverage (illustrative, before fees)

Leverage	P/L	On margin	Erasing move
1×	−$25	−5%	100%
2×	−$50	−10%	50%
5×	−$125	−25%	20%
10×	−$250	−50%	10%
20×	−$500	−100%	5%
50×	−$1,250	−250%	2%

At 20× the 5% drop equals the whole margin; at 50× the arithmetic shows a loss of 250% of it. Maintenance rules (next section) are meant to close positions before that, but prices can jump past the trigger, and the CFTC warns traders may lose more than their initial investment¹.

Why can you be liquidated before your margin is gone?

Lenders do not wait for your equity to reach zero. They set a maintenance margin: a minimum level of equity relative to the position. For U.S. stock margin accounts, FINRA Rule 4210 sets this at 25% of the current market value of long positions⁵, and firms can set higher house requirements⁴. Other platforms, including crypto derivatives venues, set their own levels, so check the rules of the one you use.

If your equity falls below that level you face a margin call or a forced close. Investor.gov warns that a broker may not have to tell you first and may sell your securities without consulting you³. The table shows how a maintenance requirement pulls the trigger price closer in the 10× example:

10× long from $2,000: price at which equity falls to an assumed maintenance level (illustrative)

Maintenance level	Close-out price	Drop from entry
0% (none)	$1,800.00	10.00%
1%	$1,818.18	9.09%
2%	$1,836.73	8.16%
5%	$1,894.74	5.26%

The close-out price solves margin + (price − entry) × units = maintenance level × price × units. With an assumed 5% level, the position is closed at about $1,894.74, a drop of 5.26% rather than 10%. Fees shrink equity further: an assumed 0.05% fee on $5,000 costs $2.50 just to open, and borrowing or funding costs build up every day the position is open. Investor.gov notes margin interest directly reduces returns and raises the break-even point³.

Risk warning

Leverage can cost more than you put in

Leverage magnifies losses as much as gains. Positions can be closed automatically at the worst moment, and price gaps can leave you owing money. Leveraged crypto products are high risk, and the platforms offering them may not give you the protections you expect. Only use money you can afford to lose entirely, and read our risk disclosure.

What does the calculator leave out?

Maintenance margin and liquidation rules, which trigger a close-out before the erasing move shown.
Trading fees, interest and funding payments. See perpetual futures and funding rates.
Slippage and price gaps. A forced close may fill at a worse price than the trigger level.
Unlimited upside risk on shorts. A price can rise without limit, so a short's possible loss has no ceiling.

What mistakes do people make with leverage?

Common beginner mistakes

Watching the price, not the position
A 5% move sounds small; at 10× it is half your margin.
Ignoring the maintenance level
Check the platform's liquidation rules. The real trigger is closer than 100% ÷ leverage.
Adding margin to rescue a losing trade
Topping up keeps a position open but puts more money at risk on the same bet.

Frequently asked questions

What is the difference between margin and leverage?

Margin is the money you put up. Leverage is the ratio of position size to that margin. $500 of margin controlling a $5,000 position is 10× leverage. Our spot vs derivatives explainer shows where each appears.

Is a lower leverage setting safe?

No. Lower leverage needs a larger move to erase your margin, but prices can still fall far, and even at 1× you can lose everything invested.

Can I lose more than my margin?

Yes, in some cases. The CFTC warns that traders in margined products may lose more than their initial deposit², for example if prices gap past the liquidation level.

Why do U.S. stock brokers limit leverage?

Under the Federal Reserve's Regulation T, investors may generally borrow up to 50% of the purchase price of margin securities³, which caps initial leverage at about 2× for those accounts.

The bottom line

Leverage turns small price moves into large gains or losses on your margin: at 10×, a 10% move against you erases it, and maintenance requirements and fees mean a platform will usually close you out sooner. Use the calculator to see the real size of a position and the move it can survive, then treat any leveraged trade as money you could lose in full, or more.

Sources

Customer Advisory: Understand the Risks of Virtual Currency Trading — U.S. Commodity Futures Trading Commission (CFTC) Primary source
Customer Advisory: Eight Things You Should Know Before Trading Forex — U.S. Commodity Futures Trading Commission (CFTC) Primary source
Investor Bulletin: Understanding Margin Accounts — Investor.gov, U.S. Securities and Exchange Commission, 2021 Primary source
Know What Triggers a Margin Call — FINRA, 2026 Primary source
Rule 4210. Margin Requirements — FINRA Primary source

How we checked this page: every figure above links to the numbered source it came from. Spotted an error? Tell the desk — see our editorial policy.