What is leverage and margin?
Leverage is the ability to control a large amount of money in the forex markets.
We offer leverage of up to 500:1 for forex in ASIC, 400:1 in our CMA jurisdiction, 50:1 in our DFSA jurisdiction and 30:1 in our FCA jurisdiction. This means for every $1 that you have in your trading account, you can trade $500 under ASIC, $400 under CMA, $50 under DFSA and $30 under FCA, in the forex market.
Leverage can exponentially increase your profits as well as your losses so it's crucial that traders take care when using leverage. The larger your position size, the larger your pip value will be and therefore, the greater the impact on your profit/loss (P/L).
Margin means the amount of money that you need to deposit into your Account to enter into or maintain a contract with us under the Agreements.
Margin requirements are expressed as a percentage of the full amount i.e. 0.5%, 2%, 1%. You can use this percentage to calculate your maximum leverage in your trading account.
The leverage ratio differs depending on regulation and what instruments and asset class you trade. Forex tends to have a higher leverage ratio, while cryptocurrency trading is generally much lower.
Here's how your margin requirement relates to the maximum leverage applicable on a range of instruments.