I'm not sure if this is what you're asking, but here goes... Keeping things simple, if you open a long trade, in the assumption that the value stock will increase, but in the short term the value drops, then you risk loosing your stake. E.G: stake $100 in stock that's trading at $100 per share, you'd have one share. The only way you'd loose all of your stake is if the stock value goes to zero. With a 'leveraged' trade, you're essentially borrowing funds from your broker in order to increase your exposure. E.G stake $100 leveraged 5x in stock that's trading at $100 per share, you have 5 shares, but now you've borrowed $400 from your broker, and he'll want his money back, plus a fee, so your trade will 'liquidate' if the stock value dips to $80; you'll loose your $100 and your broker will get his $400 back. I've not included the trading fee here, just to keep things simple, but with fees, the liquidation price would be in fact a little higher. On the up side, if the stock price goes up to $120, you'd make 5x more profit with the above example, using a leverage trade, than with not. When you close said trade, your broker can then get his money back from the sale of the 5 shares and you keep the $100 profit.