What is exposure?
Exposure is the full market value of a position, the amount that moves with the price, and not only the money you put up to open it.
In leveraged trading, exposure is usually much larger than the margin in your account. Your profit or loss follows the exposure, not the deposit. This is why leveraged CFD and forex trading can lose money fast.
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How trading exposure is calculated
For a single CFD or forex position:
Exposure = contract size × volume in lots × current price
The result is in the quote currency of the instrument. To compare it with your balance, convert it into your account currency. Contract size is the amount of the underlying in a lot, and it differs between instruments.
Worked example (hypothetical)
A trader with a USD account buys a gold position, XAUUSD:
- Contract size: C ounces per lot
- Volume: L lots
- Price: P dollars per ounce
The exposure is C × L × P dollars. Margin is only a fraction of that amount, set by the leverage. If the price moves by a small share, the account gains or loses that same share of the full exposure, and that change can be large compared with the margin.
To put real figures in, use the trading calculators and enter the instrument, volume and price.
Where the term appears
- Trading platforms. MetaTrader 4 and MetaTrader 5 have an "Exposure" tab in the terminal window. It shows your net position per asset or currency across all open trades.
- Broker and fund reports. Risk reports list exposure by asset class, region or counterparty.
- News. Phrases like "banks' exposure to government debt" mean how much a lender stands to lose if those assets fall or default.
Precise definition and edge cases
- Gross vs net exposure. Gross exposure adds up long and short positions in absolute value. Net exposure subtracts shorts from longs. A trader can have low net exposure and high gross exposure, which still carries spread, swap and execution costs.
- Currency exposure. A EUR/USD long is long EUR and short USD. Several pairs can stack up on the same currency, and the Exposure tab shows this. See currency risk.
- Correlated positions. Instruments that tend to move together, such as US100 and NAS100-style index CFDs, act like a single larger exposure. See correlation coefficient.
- Options. Exposure is often measured as delta-adjusted notional. See delta.
- Gaps and tail events. A stop-loss limits planned risk, not exposure. In a gap or flash crash, the loss can be larger than planned. See fat tails.
- Exposure vs risk. Exposure is the size of the position. Risk is how much of it you can realistically lose. That depends on stops, volatility and liquidity.
Related terms
Frequently asked questions
What does exposure mean in simple words?
It is the total value of the market you control through your open positions. Price moves apply to this full amount.
Is exposure the same as margin?
No. Margin is the deposit the broker holds to keep the position open. Exposure is the full position value, which is usually far larger with leverage.
What is market exposure?
It is how much of your capital or position value depends on a market, sector or asset moving. It is often shown as gross or net figures.
Can I lose more than my exposure?
On a plain long CFD position, the loss is linked to the price falling, so the full exposure is the practical maximum. On a short position, the price can keep rising without a limit, so the loss has no ceiling. Check the broker's terms on negative balance handling.
Where can I see my exposure?
In MetaTrader, the Exposure tab in the terminal window shows net positions by asset. You can also calculate exposure with the trading calculators.