A Deeper Look Into Your Account
Leverage can best be described as an investment strategy where the client borrows funds to increase the potential return of an investment. In other words, it provides you the opportunity to control a larger amount of money than what you are actually investing. This means that you can earn more from the same amount of investment if markets move in your favour, at the risk of losing more if markets move against you.
Margin is the level of funds you need to have in your trading account in order to open and maintain a specific trading position. Calculating and understanding your margin requirements allows you to create an effective risk management. The margin is a percentage of the size of the trade you want to open, and it is not a fee. It’s simply deducted from your account and returned when the position is closed. The total amount held to maintain all your current open positions is called “used margin”. The remaining balance in your account is available to open new positions.
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