CFD Leverage and Margin
Margin for equity index CFD trading is set at 100:1, or a 1% margin factor. This means that for every £1 you have in your account balance, you have £100 in buying and selling power for CFD trading. Keep in mind that leverage increases risk over full value trading.
How margin for CFD trading works?
Margin is the amount of money you must have in your account to open and maintain a position. At 100:1 leverage, your margin factor is 1%. This means that you are required to have a minimum cash balance of 1% of the total value of the oil positions you hold in your account at any one time.
At FOREX.com your risk is limited to the funds you have on deposit with us. There are no margin calls, so if your account balance falls below the margin requirement we will automatically close your positions to ensure that you cannot lose more money than you have in your account.
More leverage means more opportunity - and more risk
Trading using leverage offers significantly increased profit potential, but it is important to remember that it also means significantly increased risk. Your risks can be limited by monitoring your account, and by using stop losses to set the maximum loss you are prepared to take on any one position.
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Material taken with permission from Forex.com. Adaptation - International Trading School d.o.o. Beograd |