Leverage
Borrowing power that lets you control a position larger than your cash. At 10× leverage you control $10,000 of exposure with $1,000 of your own money. Higher leverage means a smaller price move can wipe out your margin, so your liquidation price sits closer to your entry.
Notional valuealso: position value
The full market value of your position, entry price × size. A leveraged position has a large notional backed by a much smaller amount of your own margin.
Initial marginalso: initial margin requirement
The amount you must put up to open a position, notional ÷ leverage. Equivalent to the initial margin rate, which is simply 1 ÷ leverage (50% at 2×, 10% at 10×).
Maintenance marginalso: maintenance requirement
The minimum equity you must keep in a position to avoid liquidation, expressed as a percentage of the position's current value. Crypto perps are often ~0.5%; US stock margin (Reg T) is usually 25%; CFD requirements are set per instrument by your broker. It can never exceed your initial margin rate, or you'd be liquidated the instant you opened.
Liquidation price
The price at which your broker or exchange force-closes your position because equity has fallen to the maintenance level. For a long it's below your entry; for a short it's above.
Entry price
The price at which you opened the position, your average fill. Every other figure is measured relative to it.
Mark pricealso: current price
The current market price used to value your open position and calculate unrealised PnL. Many venues use a smoothed 'mark' rather than the last trade to avoid unfair liquidations from brief wicks.
Unrealised PnLalso: profit and loss
The paper gain or loss on an open position: (mark − entry) × size for a long, reversed for a short. It becomes realised only when you close.
ROEalso: return on equity
Your profit or loss as a percentage of the margin you posted, PnL ÷ initial margin. Leverage magnifies ROE: a 5% move at 10× is roughly a 50% ROE swing.
Bankrollalso: free margin
The capital you have available to commit as margin. In the position size calculator, spending your whole bankroll as margin gives your maximum size.
Long & short
A long profits when price rises and is liquidated when it falls far enough. A short profits when price falls and is liquidated when it rises. The maths mirror each other around your entry.
CFDalso: contract for difference
A derivative that tracks an asset's price without owning it, traded on margin. Liquidation still applies, but the maintenance requirement is set per instrument by your broker rather than by a fixed exchange schedule, so enter your broker's figure.