Initial Margin vs Notional Exposure

The capital required to open a leveraged derivatives position, calculated as notional value divided by leverage; at 10x leverage, a $50,000 notional Bitcoin position requires $5,000 initial margin to open.

The total market value of a leveraged derivatives position, calculated as margin × leverage; the correct basis for applying risk management rules to leveraged trades; a $2,000 margin position at 10x leverage carries $20,000 of notional exposure and must be risk-managed accordingly.