Options give leverage using less cash, but the risk never disappears. It changes shape. You pay a premium up front and that premium can be lost entirely. The leverage only looks controlled on the surface. Many traders underestimate how many…
In this article, we are going to break down 1:50, or 50x leverage, as it’s also called when mentioned. What does this ratio actually do, and how does it affect the risk you’re taking when you trade? Perhaps you have…
Forex brokers love advertising huge leverage numbers.1:500. 1:1000. 1:3000. Some even go into cartoon territory with 1:8888. Most of that isn’t a trading “feature.” It’s bait and the risk is not suited for any trader, no matter the skill-level. Leverage…
Many traders choose to start with spot trading to learn execution without the added pressure of margin or liquidation risk. There are many advantages to avoiding high risk trading such as smaller losses, no risk for liquidation or margin calls,…
The reality is simple: leverage increases position size, which makes profit and loss scale faster. A 2% market move can be meaningful with a larger notional size, but the same move against you can liquidate a trade instantly. Before thinking…
During the past month, Bitcoin has been on a bull run and broke the important $30.000 level on the 11th of April. While this rise in price has been a boon for all Bitcoin holders, those using leverage on certain…
Margin requirement is the collateral that backs a leveraged position. Traders who use futures, perpetual contracts, CFDs, or margin accounts rely on posted collateral to absorb losses. When collateral runs out, the position is closed, often automatically. Understanding how requirements…
When traders talk about 1:2 leverage (also written as 2x leverage), they mean doubling their buying power with borrowed capital. At this ratio, every dollar you deposit controls two dollars in the market, a balance that increases both profits and…
When traders talk about 1:1 leverage (also called 1x), they simply mean trading with no borrowed funds, the same as buying and selling in the spot market. At this ratio, your buying power is limited to the cash you deposit,…
Spread betting uses leverage to take positions without owning the underlying asset. This increases both potential outcomes and requires careful control of risk at all times. Leverage and margin work together to increase position size. This can be useful in…