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Leverage and liquidation simulator

Leverage magnifies gains and losses by the same amount. What many overlook: it also shortens the distance to a forced close-out. Raise the leverage here and watch how small the remaining cushion gets.

How this is calculated

What it calculates

How a price move affects your stake with leveraged products, and how large a move against you wipes it out completely.

Your inputs

  • Stake: the money of your own that you put in.
  • Leverage: the multiple of market exposure you get (1× to 100×).
  • Assumed price move: in percent, negative for falling prices.

The calculation

Position moved = stake × leverage
Result = position × price move
Remaining stake = stake + result (not below zero)
Account wiped out at a move of = 100% ÷ leverage

Assumptions: no financing costs, spreads or fees. In practice the provider closes the position earlier (liquidation, maintenance margin), so the threshold shown is, if anything, too generous.

What the result means

Leverage multiplies gains and losses alike, measured against your stake. The higher the leverage, the smaller the move that destroys everything, at 100×, one percent is enough.

Example

Default values: €1,000 stake, 10× leverage, +5%. Position: €10,000, result: +€500, remaining: €1,500. At −5%, €500 would be left. The account is wiped out at −10%; at 20× leverage, already at −5%.

Simplified, without financing costs or fees. In practice the threshold sits closer, not farther away.

The full explanation is in the lesson Leverage.

Frequently asked questions

At what price move is a 25x-leveraged stake wiped out?

Four percent, since 100 divided by 25 is 4.

Why does growth rate fall past a certain leverage?

Because losses weigh more than gains. After a 20 percent loss you need a 25 percent gain. More leverage means bigger swings, and at some point the losses cost more than the extra gains bring in.

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