Leverage is the use of borrowed capital to increase one’s investment potential. In online trading, a broker will set aside a portion of the trader’s equity (required margin) while placing an investment that is larger by several degrees – thus resulting in higher profits and losses by several magnitudes. The ratio between the sum set aside and the investment actually executed differs for various asset classes and trader levels. Retail traders will get considerably lower leverage ratios than professional traders to offset the risk of loss involved.
- Some currencies and commodities may not be available in certain regions.
- While considered uncommon, spreads can vary during extreme trading conditions or during non-trading hours. If you attempt to trade under these conditions, the relevant spreads will be presented to you.