True Leverage Calculator
Your broker's advertised "1:500 leverage" isn't the leverage you are actually using. Expose your true risk and calculate the exact pip distance to a margin call.
Utilizing 0.0% of your available broker leverage limit
True Leverage vs. Broker Leverage Explained
The biggest misconception in the forex and crypto trading industry is the idea that "high leverage is dangerous." High leverage is completely harmless if you understand the difference between Broker Leverage and True Leverage.
What is Broker Leverage?
Broker leverage (e.g., 1:100 or 1:500) is simply the maximum limit your broker allows you to borrow, and it dictates the Margin Requirement.
If a broker offers 1:500 leverage, they require you to put up $1 for every $500 you control in the market. That money is "frozen" (Initial Margin) while the trade is open. Higher broker leverage is actually safer because it freezes less of your account balance, leaving you with more Free Margin to survive drawdowns and avoid margin calls.
What is True Leverage?
True Leverage is the actual, mathematical amount of leverage you are utilizing in the live market based on your position size.
True Leverage = Total Notional Value of Open Trades / Account Balance
Example: You have a $1,000 account. You open a 0.10 lot size on EUR/USD. One standard lot is $100,000, so 0.10 lots is $10,000 in notional value.
Your true leverage is $10,000 / $1,000 = 1:10.
It doesn't matter if you are trading on an offshore broker with 1:1000 limit, or a US-regulated broker with a 1:50 limit. In both scenarios, opening 0.10 lots on a $1k account exposes you to the exact same 1:10 true leverage, and every pip will be worth exactly $1. The only difference is the US broker will freeze $200 of your margin, while the offshore broker will only freeze $10.