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Risk

Leverage risk — definition & meaning

The danger that leverage magnifies losses as much as gains.

Leverage risk is the core danger of leveraged trading: the same borrowed exposure that magnifies profits magnifies losses just as much.

A small adverse move can trigger a margin call or wipe out your deposit. This is a leading reason the majority of retail traders lose money, and why using less leverage than offered is usually wiser.

The information on Trding.io is for general information only and is not investment advice. Trading involves a real risk of losing money, and most retail traders lose. Never trade money you cannot afford to lose.

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