Leverage and Margin are similar in nature but state a different point of view.
Leverage intends to show someone’s Buying power with a given amount of Funds, while Margin states the Funds needed to open or sustain a position open.
Leverage – Example:
With a 1:100 Leverage and 1,000 EUR in my balance, I can open a trade with a size of 100 times bigger than my balance.
In that case, I’m able to open a trade of 100,000 EUR.
Margin – Example:
Margin is the amount needed in my balance to open a trade of a given Size.
So, if I want to open a trade of 100,000 EUR, I need to have at least 1,000 EUR in my balance.
Margin is stated as a percentage while Leverage is stated as a ratio, but they basically show the same thing.
Leverage |
Margin |
1:500 |
0.2% |
1:200 |
0.5% |
1:100 |
1% |
1:50 |
2% |
1:30 |
3.33% |
1:10 |
10% |
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