Leverage without blowing up
The tool that makes and breaks accounts
Read
The tool that makes and breaks accounts
This is the India version of the lesson. Indian residents may trade currencies only through exchange-traded currency derivatives on NSE, BSE or MSE, with a SEBI-registered broker. Education only, no tips.
A magnifier, both ways
Leverage lets you control a large position with a small deposit. It magnifies profits — and losses — by exactly the same amount. Futures and options on NSE and BSE carry leverage too: you post margin, not the full contract value. Leverage is not evil; confusing “possible” with “sensible” is what blows up accounts.
Where the leverage comes from on an exchange
On an Indian exchange nobody “offers” you a leverage ratio. The clearing corporation sets the margin for each contract from its risk model, and the leverage is simply contract value divided by margin. Illustrative example (not current data): a contract worth ₹85,000 with ₹2,550 of margin is about 33 times leverage. Margins change with volatility, so check your broker’s margin calculator for the live figure (as of 3 November 2026).
Risk-first sizing beats leverage-first
Do not ask “how big can I go?”. Ask “how much can I lose if my stop hits?”. Fix your risk at 1–2% of the account, place your stop by structure, and let those two numbers DECIDE your position size. Leverage then becomes a side effect of a properly sized trade.
Rules that keep you alive
Survival is a set of habits, not a single trick.
You can survive leverage
Leverage magnifies gains AND losses by the same amount
On an exchange, leverage is contract value divided by the margin the clearing corporation sets
Size from risk (1–2%) and your stop, not from what the margin allows
Unmet margin calls lead the broker to square off your position
Survival = small risk per trade, always a stop, mind total exposure