What is leverage?

Leverage is a financial tool which helps to borrow a particular amount of the money that are needed to invest into a particular subject. Forex trading offers high leverage and traders can use that to maximise their profits. However, leverage should be used cautiously, because it magnifies the possibility of profit as well as the loss.

What is margin?

The amount of capital that is needed as a deposit to open a position with your broker is called the margin.

What is the connection between margin and leverage?

Leverage is created by using margin.

How is margin-based leverage calculated?

Margin-Based Leverage = Total Value of Transaction / Margin Required

 

 

 

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