Safe Leverage Calculator
Estimate a volatility-based leverage ceiling from the daily move size, the loss you can tolerate and a volatility multiple.
Results
Fill in the inputs and click Calculate.
- Leverage Cap
- –
- Expected Worst Move
- –
Risk disclaimer
Volatility estimates contain error; gaps, jumps and liquidation mechanics can make real risk higher.
Why size leverage by volatility?
The same leverage is far riskier on a high-volatility asset, which needs more room for bad moves.
This tool assumes an adverse move of multiple × daily range and caps leverage so that move stays within your tolerable loss.
How to use
- Estimate the asset's daily move (e.g. 2%).
- Enter the loss you can tolerate (e.g. 10%, margin basis).
- Enter the volatility multiple (default 2) and click Calculate.
Formula
- Expected worst move = multiple × daily move %
- Leverage cap = tolerable loss % ÷ expected worst move
Example
Daily 2%, loss budget 10%, multiple 2 → worst move 4%, cap ≈ 2.5×.
If daily move rises to 5%, the cap drops to 1×.
FAQ
Is this a guaranteed safe value?
No. It is a volatility-based guideline; extreme moves can still exceed the assumption.
What basis are the percentages?
Read them as tolerable loss on margin; use smaller numbers for a more conservative account-basis view.