Notional Amount
a.k.a. Notional value, Notional
The full face value of a position or contract, as opposed to the margin you actually put up.
In plain English
The full face value of a position or contract, as opposed to the margin you actually put up.
The notional amount is the real size of your bet. Buy one standard lot of EUR/USD and the notional is 100,000 euros, even if your broker only asked for a couple of thousand dollars of margin. Profits and losses are calculated on the notional, not on the margin.
That gap is the whole story of leverage. A 1% move on a 100,000 notional is 1,000. If your margin was 2,000, that one move just changed your deposit by half.
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