Leverage is the percentage (%) of borrowed capital allowed by your broker to use when you open a trade position. Typically in Stock market when you buy 100 shares of a company trading at $10 per share, you are required $1,000 to open the trade. Some stock brokers would let you borrow money from them, most cases it is 50% of the total stock value. So instead of $1,000 you are now only required to have $500. This helps traders to buy more shares with same amount of money.
Margin and leverage are concepts that go hand-in-hand in currency trading. Margin is expressed as the percentage of position size (e.g. 5% or 1%).On a 1% margin, for instance, a position of $1,000,000 will require a deposit of $10,000.
Actual Required Margin would change by Leverage Level
|Leverage||Amount Traded||Required Margin|
|Equity Amount||Leverage Level||Leverage Level per Exposure|
|– IC-FX Account|
|$500 ~ $49,999||Up to 500:1||If total open position becomes 50 lots for currency pairs, account leverage could be 200:1|
|$50,000 ~ $99,999||Up to 200:1||If total open position becomes 100 lots for currency pairs, account leverage could be 100:1|
|$100,000 ~||Up to 100:1||If total open position becomes 100 lots for currency pairs, account leverage could be 50:1|
|– ECN Account|
|$50,000 ~ $99,999||Up to 200:1||Leverage not changed.|
|$100,000 ~||Up to 100:1|