Notional Value

Notional value is the reference amount of an instrument or underlying exposure used to calculate a leveraged position’s gains, losses, and obligations.

It can equal units multiplied by reference price even when the trader posts only a smaller margin amount. Fees, financing, and risk limits may be based on notional rather than cash invested, making it central to understanding leverage. Notional is not necessarily the amount exchanged at settlement, but adverse movement on that larger reference exposure can materially affect account equity.