In Finance, Leverage is borrowing money to supplement existing funds for investments in such a way that the potential positive or negative outcome is magnified and/or enhanced.
For example, trading on leverage is like buying a home. When you want to buy a house with a mortgage, it means you don’t have enough money to buy the property outright. If you put a 20% deposit on a house worth $200,000 and make regular payments to the bank. You are using a smaller amount of money ($40,000) to control a larger asset ($200,000 house).
In Forex, trading on a leverage allows you to lever up your purchases.
As far as Equiti’s clients are concerned the amount of leverage on their accounts will in part determine the amount of funds they need to put up front for a trade.
At Equiti we offer a ‘Fixed Leverage’. FX products have a maximum fixed leverage of 1:500. When you change your account leverage, Major and Minor pairs will reflect that and Exotic pairs and Metals will change in proportion by one-tenth.
Example 1:
|
Current Leverage on FX Major and Minors Pairs |
New Leverage on FX Major and Minors Pairs |
Leverage on Exotic Pairs |
|---|---|---|
| 1:500 | 1:500 | 1:50 |
| 1:500 | 1:400 | 1:40 |
| 1:500 | 1:300 | 1:30 |
| 1:500 | 1:200 | 1:20 |
| 1:500 | 1:100 | 1:10 |
Example 2:
|
Current Leverage on XAU and XAG Pairs |
New Leverage on XAU and XAG Pairs |
Leverage on XPTUSD |
|---|---|---|
| 1:500 | 1:500 | 1:50 |
| 1:500 | 1:400 | 1:40 |
| 1:500 | 1:300 | 1:30 |
| 1:500 | 1:200 | 1:20 |
| 1:500 | 1:100 | 1:10 |
If your account leverage is 1:500 and you change it to 1:100 all exotic pairs and XPTUSD will reduce to 1:10.
Calculation: 1/10 of 100 = (100 * 1) / 10 = 100 / 10 = 10
Click on the following link to view the full specification for FX products
CFD Commodities and Indices
|
Maximum Leverage on CFDs |
|
|---|---|
|
Major CFDs |
1:200 |
|
Minor CFDs |
1:100 |
Full product specifications can be found in the following links for Commodities, Indices and Shares