When you trade on margin, you use leverage: you can open positions with more significant amounts than you have on your account.
For example, if you trade 1 standard lot ($100,000) while having only $1,000, you use a leverage of 1:100.
Leverage increases the volatility of your portfolio. Simply put, using leverage you can earn more with the same amount of money. However, you can lose more, too. So, remember that trading with bigger leverage bears higher risks. A high leverage might eat your margin faster than a medium or low one.
For example, with a leverage of 1:100, you can open a $10,000 trade having only $100 on your account. If the trade moves by 1% in your direction, you will receive a profit of $100. Conversely, a 1% move in the opposite direction will result in a loss of $100.
It is also important to keep in mind a few cases that might happen when changing your leverage:
- If you change your leverage to a smaller one, there is a risk of losing your funds since, in this case, a higher margin will be required to enter a trade.
- If you change your leverage to a bigger one, some of your opened positions might be closed, as trades with a higher leverage more significantly affect your profits or losses.
- In case you do not have enough margin on your account, you will not be able to enter a new trade.
The maximum available leverage is 1:3000.
We would like to remind you that we have specific leverage rules correlating with the equity amount. The company is entitled to apply leverage changes to the positions opened earlier, as well as to the reopened positions, according to these limitations:
|Equity / Available on the Customer's Trading account (USD or EUR)||Leverage|
|0 - 199||1:3,000|
|200 - 1,999||1:2,000|
|2,000 - 4,999||1:1,000|
|5,000 - 29,999||1:500|
|30,000 - 149,999||1:200|
|150,000 or more||
In your Personal Area, you can see your Equity as "Available" funds. You can check this line in the account settings to find out the current Equity or Available funds on your trading account and adjust your leverage limits accordingly.
It is important to remember that leverage can only be changed for Forex and Forex Exotic. For all other instruments, the leverage is fixed. You can refer to the following table for more information:
|Indices and Energies||XBRUSD||1:200|