Beginner Guide: What Leverage and Margin Really Mean

Leverage lets you control a larger position with a smaller deposit, known as margin. If your broker offers 1:30 leverage, a $1,000 deposit can control a $30,000 position.

This week's chip-stock selloff, triggered by Tesla's spending cut and a weak Lam Research forecast, shows why margin matters: sharp swings can trigger margin calls quickly if positions are oversized.

Rule of thumb for beginners: never risk more than 1-2% of your account on a single trade, and always know your liquidation level before entering.