Leverage & Margin Call Blowup Simulator Risk Lab

Model financial position leverage, maintenance margin rules, overnight price gap shocks, and negative broker deficits.

1x Unleveraged Spot 1x Spot
Full equity backing. Zero leverage risk or gap deficit exposure.
3x Swing Position 3x Swing
Moderate leverage. Liquidates on -33.3% market drop.
10x Intraday Volatility 10x Intraday
High leverage. Liquidates on ~9.5% decline. Vulnerable to overnight gaps.
20x Gap Blowup Hazard 20x Gap Hazard
Extremely aggressive. $1M exposure on $50k margin. A -15% gap causes $100k net broker debt.
Position Controls Real-time Inputs
$50,000
20x
$100.00
0.5%
Position Units: 10,000
Borrowed Debt: $950,000
Initial Position Value: $1,000,000

Position Equity Decay & Negative Equity Waterfall

D3.js Reactive Plot
Overnight Market Gap Price Shock: -15.0%
0% (No Gap) -25% Gap -50% Gap Shock
Initial Position Value
$1,000,000
Total Market Exposure
Initial Margin Required
$50,000
Deposited Capital
Liquidation Trigger Price
$99.47
-0.53% drop triggers call
Post-Drop Asset Price
$85.00
Gapped down by -15.0%
Equity After Gap Shock
-$100,000
Total Loss: 300.0%
Broker Deficit Liability
$100,000
Unsecured Debt Owed
Risk Diagnosis & Forced Liquidation Mechanics
With 20x leverage on $50,000 of equity, your total position controls $1,000,000 worth of underlying assets. A price drop of just -0.53% drops position equity below the maintenance margin threshold ($99.47), triggering forced liquidation. When an overnight market gap shock causes an immediate -15.0% decline (to $85.00), orders cannot execute sequentially at the stop price. The account equity is entirely wiped out, leaving a $100,000 deficit that constitutes personal legal debt owed to the broker.
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