How to Calculate Real Leverage

One ceiling, two dials

The leverage printed on an account is not the leverage you are using. It is a ceiling: one-to-one-hundred means the broker will lend up to a hundred times your deposit, if you ask. Real leverage is how much you actually asked for: the value of everything you have open, divided by the equity — what the account is worth right now. One lot of the euro against the dollar at 1.15872 is 115,872 dollars of position; on a five-thousand-dollar account that is 23 to 1. A tenth of a lot is 11,587 dollars of position, 2.3 to 1. Same broker, same ceiling, and the needle on the second account is a tenth of the way along.

The two real days at each dial

The reason the number matters is what a day does to the account. A pip is the fourth decimal place, ten dollars at one lot. On 3 September 2026 the euro rose 38.7 pips: at 23 to 1 that was $387, 7.7 per cent of the five thousand; at 2.3 to 1 it was $38.70, under one per cent. On 28 August the euro fell 71 pips: at 23 to 1 that was $710, 14.2 per cent of the account; at 2.3 to 1, $71. The two days moved the same pips for both accounts. The dial decided what share of the account each day was.

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