Leverage and effective leverage
Leverage set per position and leverage actually carried by an account are two different measurements, and only the second one describes risk.
Effective leverage
Effective leverage is total notional exposure divided by account value. A trader running five positions at 3× each is not at 3× — they may be at 15× against their account.
This is the number shown at the top of every wallet page here, because it is the one that determines what a 10 % adverse move does.
Correlation is hidden leverage
Three long positions in assets that move together are one position with three names. Portfolio concentration is measured here with a Herfindahl index over position values, where 1.00 means everything sits in a single market.
A diversified-looking book of correlated longs liquidates in one move.
Leverage and funding interact
Higher leverage means a larger notional for the same capital, and funding is charged on notional. Doubling leverage doubles the daily funding bill while halving the distance to liquidation.