Risk & Margin

Leverage

Controlling a position with a value much larger than the cash directly paid — amplifies both potential gains and potential losses.

Leverage means controlling a position with a value much larger than the cash directly paid upfront, made possible in F&O trading through the margin mechanism. Because leverage amplifies exposure, it amplifies both potential gains and potential losses relative to a simple, unleveraged cash purchase.

See how leverage relates to margin requirements in Margin in F&O Trading Explained: SPAN and Exposure Margin.