Leverage up to 400:1
Negative Balance Protection
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Popular Tool for FX Traders
Margin is a deposit required to open and maintain positions. This is not a fee or a transaction cost, but rather a portion of your account equity set aside and allocated as a deposit to secure the open positions.
Leverage is the ratio of your required margin to your trade size. Leverage allows you to increase your market exposure past your actual investment.
Using leverage means that you can trade positions larger than the amount of money in your trading account. Leverage amount is expressed as a ratio, for instance 50:1, 100:1, or 400:1. Assuming that you have $1,000 in your trading account and you trade ticket sizes of 400,000 USD/JPY, your leverage will equate 400:1.
Clients whose equity is lower than $10,000 can apply for a maximum of 400:1 leverage. Accounts with equity exceeding $10,000 are allowed to apply for a maximum of 200:1 foreign exchange leverage. However, for Traders with equity exceeding $50,000, leverage of maximum 100:1 is permitted.
Potentially Larger Profits
The reason why leverages exist in a financial market is because they allow a trader to increasing the scale of their profits.
Scenario: Trader A and Trader B both buy USD/JPY with the same buying price and settlement price, and the settlement price rises when closing position.
Questions: How leverage would affect the orders when Trader A would open a position with 100 times leverage and Trader B would go for a 10 times leverage?
Answer: Trader A earns 41.5% and Trader B earns 4.15% of their account equity.
|Trader A||Trader B|
|Leverage||100:1 (100 times)||10:1 (10 times)|
(Buy 10 lots, 100k per lot)
(Buy 1 lot, 100K per lot)
|Net profit of 100 points||$5,120.00||$5,12.00|
Forced liquidation is the sale of all investments within a customer's margin account by a brokerage firm, usually after the account has failed to meet margin requirements and margin calls.when the margin level is less than or equal to 100%, it indicates that the eauity has been lower than the minimum margin requirement of the current position, and the system will force the liquidation until the margin level is greater than 100%.