Defining Margin and Leverage
Leverage allows a trader to fund the account with just a partial amount of the amount shown in the trade. Leverage is a fantastic advantage which magnifies the deposit normally required for entering or maintaining a position.
To illustrate the above, let’s say the trade shows $10,000 and the margin shows $25 then your leverage is that of 400.
As you’ll see, margin is generally referred to as a percentage. For instance, if the leverage is 400:1 the margin will be one quarter percent. The margin is the money required for you to deposit when executing a trade. So if your trade is $10,000, the usable margin should amount to $25 or 25%.
Illustration:
|
Trade Size |
Leverage
|
Leverage
|
Used Margin
|
Balance
|
Usable Margin
|
|
2,000,000 USD
|
X400
|
0.25%
|
5,000 USD
|
100,000
|
95,000
|
|
10,000 USD
|
X50
|
2%
|
200 USD
|
1,200
|
1,000
|
|
20,000 USD
|
X25
|
4%
|
800 USD
|
2,800
|
2,000
|
Types of leverage available to you:
Currencies
Greatest leverage 400:1 (For all currency pairs)
Smallest margin (deposit required) 0.25% (For all currency pairs)
Smallest Lot: 10,000 units in size
Commodities- Gold & Silver
Greatest leverage X25
Smallest margin (deposit required) 4%
Smallest size for a Lot of Gold: 10 units
Smallest size for a Lot of Sterling: 10 units
Indices
Maximal leverage: X50
Minimal margin: 2%
Minimal Lot size: 10 units
How to adjust the leverage amount on the platform:
The eToro adjustable platform allows traders to change the amount of leverage and margin as desired per trade. This also affords traders the opportunity to choose their individual level of risk taking or profit techniques. And it’s all simply done with just a click!
It’s important you note that the available leverage for a trade that remains open throughout the weekend could be different. Should you require additional information go to the "/etoro-platform-guide/Carry-Trades-Over-Weekend.aspx">over weekend section.
