Quick question on leverage

Beginner Questions
1

quick question trying to understand leverage. $100 account balance at 10:1 leverage is 1000 margin, 100x10=1000?

2

There’s a topic in the School.

It’s about leverage. And you’re right on the question.

3

with a $100 account balance and 10:1 leverage, you control a $1000 position

1 Like
4

Let’s understand this with an example,
If a broker offering leverage of 1 ratio to 100 (1:100) and trader has a capital of Euro 1000. It means the trader has a trading capital of Euro 100000.
Euro 1000 x 100(leverage) = Euro 1,00,000 (Trading Capital)
If a trader decides to buy EUR/USD at 1.2075 and later closes his position at 1.2125 (Difference in Pips – 0.0050), it will result in USD 500 profits.
Profit:- Euro 100000 (base currency) x 0.0050 (pips) = USD 500 (Quote currency)

for more info you can watch complete video here: What is Leverage in Forex

5

Yes, you’ve got it :+1: