Ask five people in India how this is calculated and you will get five confident answers, most of them slightly wrong. It is not their fault — the arithmetic is rarely explained, only the result is shown. So let us do it the other way round: first the logic, then the formula, then your own numbers in the margin & leverage calculator.
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Prefer to start with your own figures? Use the Margin & Leverage Calculator now, or continue for the formula and a worked example.
How this is worked out
Leverage lets you control a position larger than your cash. The margin blocked is the position value divided by the leverage. Because the whole position moves, a small adverse move is a large percentage of your own money — the calculator shows exactly how large.
The formula behind it:
Position = Cash × Leverage · Margin = Position ÷ Leverage · Loss = Position × Stop-loss %
| Symbol | What it means |
|---|---|
Cash |
Money available in your account |
Leverage |
Multiple offered by the broker |
Stop-loss % |
Adverse move at which you exit |
Nothing is rounded away quietly and nothing is assumed on your behalf. If a figure appears in the result, it came from something you entered.
A worked example you can follow
₹1,00,000 at 5× controls ₹5,00,000; a 2% adverse move costs ₹10,000, which is 10% of your cash.
Change any one input and watch the result move — that sensitivity is the real lesson. It is far more useful than memorising a single outcome, because your own rate, tenure or contribution will never match the example exactly.
Using the Margin & Leverage Calculator, step by step
- Open the Margin & Leverage Calculator.
- Enter your figures. Use the ones on your statement, sanction letter or scheme document rather than a remembered number.
- Read the result card — the headline figure plus the breakdown that produced it.
- Adjust one input at a time to see what genuinely moves the outcome.
- Tap Download PDF to keep a copy of the calculation, with your inputs and assumptions printed on it.
The PDF takes a few seconds to build because it is a properly typeset report, not a screenshot. You will see a progress message while it is being prepared, and the download starts on its own.
Practical pointers
- Decide the rupee loss you accept before deciding the position size.
- Practise leveraged trades with virtual money on the VIA Trade Simulator first.
Common mistakes worth avoiding
- Using the full buying power the broker offers.
- Ignoring the interest charged on the borrowed amount.
If you want to go a level deeper afterwards, read up on position sizing and margin calls. Both come up the moment you start comparing options seriously.