Simplified Leverage & Margin Illustrator
IMPORTANT EDUCATIONAL DISCLAIMER:
- This tool is a highly simplified educational illustrator and is NOT a realistic simulation of actual margin trading or leveraged investing.
- It does NOT account for:
- Interest charges on borrowed funds (margin loans).
- Broker-specific margin requirements (which vary by asset, account type, and broker).
- The mechanics of actual margin calls (e.g., forced liquidation, specific timelines, order of liquidation).
- Different types of leveraged instruments (futures, options, leveraged ETFs have their own unique and complex risk profiles).
- Transaction costs, fees, or taxes.
- Leverage magnifies both potential profits AND potential losses significantly. Trading on margin carries a high degree of risk and may result in losses exceeding your initial investment. It is not suitable for all investors.
- The results generated by this tool are purely hypothetical estimates based on the simplified model and the inputs you provide.
- This tool should NEVER be used for making actual investment or trading decisions.
- ALWAYS consult with a qualified financial advisor and thoroughly understand your broker's margin agreement and the risks involved before engaging in any leveraged trading or margin investing.
Investment Setup
1x means no leverage. 2x means 1 part own, 1 part borrowed.
Scenario & Margin
Broker's minimum equity % to avoid margin call.