The full market value of the currency you control, as opposed to the margin posted for it; the number that determines how much you actually make or lose per pip.
Notional exposure sums the market value each position represents: shares times price, contracts times price times multiplier, options times delta times 100 times the underlying price.
It reveals leverage that account balances hide. Four ES contracts at 5,000 are $1,000,000 of index exposure, which on a $120,000 account is 8.3:1 no matter how comfortable the margin looks. Ten zero-dte options might cost $900 in premium and represent $400,000 of delta-equivalent exposure for a few hours.
Track it daily as a single number and as a percentage of equity. Combined with beta-weighted-delta, it answers the only question that matters in a crash: if everything gaps 5% against me overnight, what happens to my account?
Original diagrams for the ideas on this page. Illustrative, not real market data.
Delta across the range of prices. Delta says how much a call's price moves for a one-point move in the stock. Far below the strike it is near 0 and the option barely reacts; at the strike it is about 0.50; far above it approaches 1 and tracks the stock.Margin and leverage. A $5,000 deposit can control a $100,000 position, which is 20:1 leverage. Because the loss is measured on the full $100,000, a 2.5% move against you halves the deposit and brings a margin call, and a 5% move uses all of it.
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