Broker to Trading

These brokers offer trading with high leverage available. However increasing leverage increases risk.

Trading leverage explained

What is leverage ?

Leverage is the capacity to take a position in the market at a cost less than its value in the market (though there may be other fees and costs in addition to the market cost). For example 2:1 leverage can mean that for every order, the trader needs to put up 1/2 of its value (which is the same as a 50% margin requirement).

Is leverage different from margin ?

Margin is the percentage of the value of a market which needs to be put up to take the position. Leverage and margin are two sides of the same coin. For example 30:1 leverage is margin of 3.33% (as 3.33% is approximately 1/30th).

What is 1:1 leverage  ?

1:1 leverage is where the value of the market can be the same as the order cost, i.e. where there is no leverage.

What is maximum leverage ?

This is the most leverage available at a broker either overall or for a given market. In the table above, the maximum leverage is the most available at the broker overall.

Do all markets have the same maximum leverage ?

Different markets typically have different maximum leverage available. Typically the maximum leverage is for Forex.

Do all brokers have the same maximum leverage ?

They do not. Maximum leverage may be set by a regulator. Different brokers can offer different maximum leverages.

Has maximum leverage in the EEA changed ?

In the EEA (European Economic Area), the maximum leverage is now set at and can be lower than this depending on the market.

Does a trader need to trade with high leverage ?

While leverage can seem attractive in that it allows smaller accounts to trade larger position sizes, increasing leverage increases risk. This is because, for example, with higher leverage it can be possible to take positions with higher lot sizes, accelerating both gains and losses, without changing the account size.

Markets can have complex movements up and down thus with leverage, exposure to moves against a position can be magnified. This can make it harder to hold onto a position which may work out, but retraces before it does, for example, and accelerate losses for positions which retrace deeply or do not turn in the required direction in time.

Can the trader trade with lower leverage ?

The problem with lower leverage is that it can make it harder to make a trade for smaller account sizes. However, smaller position sizes (e.g. micro lots or lower in Forex) can be a way to trade with lower leverage.