Quote:
Originally Posted by shadow
Ok wait, for some reason I just woke up today and Lost my mind to this leverage thing, I thought I had it down and then reviewing this thread, I just got really confused. in the case of leverage is this true?
On a $10,000
400:1 - pip value = $40
200:1 - pip value = $20
100:1 - pip value = $10
etc.
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Pip values are based on position size. They are only related to leverage to the extent that leverage determines the size of the positions you can take (or the number of them). Therefore:
400,000 EUR/USD position pip value = $40
200,000 EUR/USD position pip value = $20
100,000 EUR/USD position pip value = $10
If EUR/USD is valued at $1.30, and you have $1300 in your account (1000 EUR x $1.30/EUR), it would require 400:1 leverage to have a $40/pip position, 200:1 for $20/pip, and 100:1 for $10/pip.
Quote:
Originally Posted by shadow
... or does less margin used for higher leverage less because you are borrowing more?
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Exactly. If you are taking on a $100,000 position, your margin requirement is lower at higher leverage:
400:1 = $250 margin
200:1 = $500
100:1 = $1000 margin