Leverage ratios in numbers: 1:30, 1:100 and 1:500 side by side
The Nuqta Markets team · 28 October 2026 · 6 min read · How we write
In short
- Margin required = notional ÷ leverage; 1:100 means a 1% deposit.
- The account leverage does not change the pip value of a trade.
- Effective leverage = total open notional ÷ equity; that is the number risk follows.
Leverage is usually described with words like "power" or "danger". This article leaves the words out and puts the ratios side by side: what 1:30, 1:100 and 1:500 do to the margin of the same trade, what they do not do, and the one number that actually tracks risk.
A ratio is a deposit percentage
A leverage of 1:N means the broker asks for 1/N of the position's notional value as margin.
| Leverage | Margin as % of notional | Margin for 1 lot EURUSD at 1.1000 | Margin for 0.10 lot |
|---|---|---|---|
| 1:30 | 3.33% | $3,666.67 | $366.67 |
| 1:50 | 2% | $2,200 | $220 |
| 1:100 | 1% | $1,100 | $110 |
| 1:200 | 0.5% | $550 | $55 |
| 1:500 | 0.2% | $220 | $22 |
Illustrative calculation, not an expectation of results.
The notional of one lot here is 100,000 euros × 1.1000 = $110,000. Every row is the same trade; only the deposit changes.
What leverage does not change
The pip value of 0.10 lot of EURUSD is about $1 in every row of that table. A 20-pip loss is about $20 whether the account runs at 1:30 or 1:500. Leverage does not make a pip bigger; it makes a bigger lot affordable. The pip value calculator shows the same number whatever leverage is set.
That is why the account's maximum leverage is a ceiling, not the leverage being used.
Effective leverage: the number risk follows
Effective leverage = total notional of open positions ÷ equity
Take a $5,000 account trading EURUSD at 1.1000:
| Open position | Notional | Effective leverage | Result of a 1% move (about 110 pips) |
|---|---|---|---|
| 0.10 lot | $11,000 | 2.2 : 1 | about 2.2% of equity |
| 0.50 lot | $55,000 | 11 : 1 | about 11% of equity |
| 1.00 lot | $110,000 | 22 : 1 | about 22% of equity |
| 2.00 lots | $220,000 | 44 : 1 | about 44% of equity |
Illustrative calculation, not an expectation of results.
The rule is simple: a 1% move in the pair changes equity by roughly the effective leverage, in percent. The same table holds on a 1:30 account and on a 1:500 account, as long as the margin is available. Where the higher ratio matters is how far the account can go before the broker closes it, which is worked out in stop out level: a 5-step calculation.
Limits set by regulators
Retail leverage is capped in many jurisdictions. Under the rules of ESMA in the EU and the FCA in the UK the caps are 1:30 on major currency pairs; 1:20 on other currency pairs, gold and major indices; 1:10 on other commodities and non-major indices; 1:5 on individual shares; and 1:2 on crypto. Regulators elsewhere set their own limits, and professional accounts can differ.
Reading the numbers together
A position size starts from the stop, not from the leverage. The lot size calculator works out the lot from money at risk and stop distance; effective leverage is then a useful second check on how large the total exposure has become, especially with several trades open. Margin level, the platform's version of the same idea, is explained in what is margin level.
In short
Leverage sets the deposit: 1/N of notional. It leaves pip value untouched. Effective leverage, total notional over equity, is the number that tells you how much a 1% move would do to the account. Watch that one.
Questions people also ask
Does higher leverage make each pip worth more?
No. Pip value depends only on the lot size and the pair. Higher leverage lowers the margin, which makes it possible to open a bigger lot; the bigger lot is what raises the risk.
Why is retail leverage capped at 1:30 in some countries?
Regulators such as ESMA in the EU and the FCA in the UK limit retail CFD leverage: 1:30 on major currency pairs, lower on other pairs, gold, indices, commodities, shares and crypto. Other regulators set their own limits.
How do I calculate my effective leverage?
Add the notional value of every open position in your account currency and divide by equity. 0.5 lot of EURUSD at 1.1000 is $55,000; on $5,000 of equity that is 11:1, whatever the account's maximum leverage.
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