CFD Leverage is defined as the use of borrowed capital, such as “margin” allowing the Forex and CFD trader to gain access to larger sums of capital. This can heighten profits and losses and should be used wisely.
In compliance with ASIC’s Products Intervention Order, retail clients in Australia have access to maximum leverage of up to 30:1 on FX major currency pairs. Other CFD products such as index, gold, commodity, stocks, cryptocurrency and more carry lower leverage limits.
Examples of Leveraged Forex Trading
Forex Trader A has $5,000 USD:
If Forex Trader A has an account leverage of 10:1 and they wish to use $1,000 on one Forex trade as margin, they will have exposure of $10,000 in base currency ($1000) = 10 x $1,000 = $10,000 (trade value).
Vantage is a non-advisory CFD broker and will not provide you with investment or personal trading advice. For such advice, please consult a registered financial advisor. For Forex market news and commentary, please see the Vantage Market News and Trade Ideas.