Leverage on crypto and Buying Power on stocks: what's the difference?
Before launching trading in US stocks on Hash Hedge, we break down the main difference between the stock market and crypto: how leverage works here.
In crypto, the trader chooses leverage for each individual position themselves. In stocks, the logic is different: the available volume is set by Buying Power, a total limit for all open trades on the account.
Leverage in crypto manages a specific trade. Buying Power on stocks shows how much volume can be used across the entire account.
How it works in crypto
Let's say a BTC trade uses $1,000 in margin and ×5 leverage. The position size will be $5,000, and profit and loss will be calculated based on that volume.
The logic is simple: margin → leverage → position size. For a new trade, leverage is chosen again.
How it works in stocks
Now imagine an account of $1,000 with ×5 Buying Power. The total volume of open positions can be up to $5,000.
This limit can be used in a single trade or distributed across several securities. For example: open Apple for $1,000, Tesla for $2,000, and Nvidia for $2,000. In total, $5,000 of Buying Power will be used.
At the same time, there's no need to separately choose leverage for each stock. The trader simply selects the position size and monitors how much of the limit is already used.
What's important to keep in mind
Buying Power does not mean the entire available limit must be used. If positions are open for a total of $5,000, a 1% market move will change the result by about $50, excluding fees and slippage.
Therefore, when trading stocks, it's important to look not only at the available ×5, but also at the actual volume of all open positions.
Crypto: leverage for a single position. Stocks: Buying Power for the entire account.
