Understanding
Margin and Leverage
Learn about margin requirements and leverage ratios in trading to make informed decisions and manage your risk effectively.
Flexible Leverage Options
Maximum Leverage
Equity Ranges
Minimum Margin
1000 : 1
0 — 999
0.1%
800 : 1
1.000 — 1.999
0.125%
500 : 1
2.000 — 9.999
0.2%
400 : 1
10.000 — 29.999
0.25%
300 : 1
30.000 — 49.999
0.33%
200 : 1
50.000 — 79.999
0.5%
100 : 1
More than 80.000
1%
Maximum Leverage, Equity Ranges and Minimum Required Margin
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Margin & Leverage FAQs
Margin requirements play a crucial role in risk management for traders and investors. Here are some aspects to consider:
- Initial Margin: The minimum amount of funds required to open a margin position. Failing to meet initial margin requirements can prevent traders from entering desired positions or result in forced liquidation.
- Maintenance Margin: The minimum account balance that traders must maintain to keep a margin position open. Falling below the maintenance margin triggers a margin call, potentially leading to forced liquidation if not promptly addressed.
- Risk Assessment: Proper risk assessment is essential when trading on margin. Traders should evaluate their risk tolerance, account size, market conditions, and potential losses before engaging in margin trading to mitigate the risk of excessive leverage and margin calls.
Leverage can be a valuable tool, but it comes with inherent risks:
- Amplified Profits: As mentioned earlier, leverage can significantly magnify your profits if the market moves in your favor.
- Increased Trading Power: Leverage allows you to control a larger position size with less capital, potentially leading to greater returns on your investment.
- Access to Larger Markets: By using leverage, you can gain access to markets that might otherwise require a larger initial investment.
Leverage can amplify both gains and losses in financial transactions. Here are some risks associated with leverage:
- Amplified Losses: The biggest risk of leverage is the potential for magnified losses. A small adverse market movement can wipe out your entire margin deposit and potentially lead to further losses exceeding your initial investment.
- Margin Calls: If the market moves against you and your account equity falls below a certain threshold (maintenance margin), your broker might issue a margin call. This requires you to deposit additional funds to maintain your position or face forced liquidation at a potentially unfavorable price.
- Emotional Trading: The potential for amplified profits and losses can lead to emotional trading decisions, jeopardizing your trading discipline and risk management strategies.
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Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. These products may not be suitable for all investors. It is important to fully understand the risks involved and seek independent advice if necessary. You should carefully consider whether you understand how CFDs work and whether you can afford to take the high risk of losing money. The value of your investment may go down as well as up.
Please review our Legal Documents to understand the risks involved before you invest. See your rights and responsibilities as a retail client.
Please review our Legal Documents to understand the risks involved before you invest. See your rights and responsibilities as a retail client.
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