What is the difference between Leverage and Margin requirement?

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:

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.