Leverage and Margin are related concepts but from different perspectives.
- Leverage: Shows your buying power with a given amount of funds.
- Margin: Indicates the funds needed to open or maintain a position.
Leverage Example:
- With 1:100 leverage and 1,000 EUR in your balance, you can open a trade 100 times bigger than your balance.
- This means you can open a trade worth 100,000 EUR.
Margin Example:
- Margin is the amount needed in your balance to open a trade of a given size.
- To open a trade of 100,000 EUR, you need at least 1,000 EUR in your balance.
Leverage vs. Margin:
- Leverage is expressed as a ratio (e.g., 1:100).
- Margin is expressed as a percentage (e.g., 1%).
Comparison Table:
|
Leverage |
Margin |
|
1:500 |
0.2% |
|
1:200 |
0.5% |
|
1:100 |
1% |
|
1:50 |
2% |
|
1:30 |
3.33% |
|
1:10 |
10% |
In summary, leverage amplifies your trading power, allowing you to control larger positions with a smaller amount of funds. Margin is the required amount of money you need in your account to open and maintain these larger positions.
Comments
0 comments
Article is closed for comments.