# Leverage

Stella Strategy offers users the ability to open leverage positions across a variety of strategies. The leverage level associated with each strategy is determined by two key factors:

1. [Collateral Factor (CF)](/stella-doc/stella-yield/stella-strategy/collateral-factor.md): This factor represents the value assigned to each unit of assets used as collateral in the position.
2. [Borrow Factor (BF)](/stella-doc/stella-yield/stella-strategy/borrow-factor.md): This factor determines the value assigned to each unit of assets borrowed in the position.

The factor value is carefully tailored based on the historical volatility and risk profile of each asset by Stella research team to ensure that the users and protocol are safe.

The maximum achievable leverage through the smart contract is determined by the following formula

$$
\text{MaxLeverage} = \frac{\text{BF}}{\text{BF}-\text{CF}}
$$

However, the maximum leverage displayed on the Stella App is calculated using the following formula as a precautionary measure against excessive exposure to liquidation risk.

$$
\text{MaxFELeverage} = \frac{1}{1 - threshold\cdot\frac{\text{CF}}{\text{BF}}}
$$

Normally, the *threshold* variable is set to 0.97-0.98.5 based on each strategy


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