What is leverage? How does it work? Why is less money required for a higher leverage and is the risk higher?

Leverage is the multiplication of your balance. This allows you to open bigger trading positions since the margin required will be lowered according to the leverage of the instrument you have chosen to trade. Even though with leverage you can make a bigger profit, there is also a risk of having a bigger loss because the positions you open will be of higher volume (lot size).

Example:

Your account balance is 100 EUR

The leverage based on the instrument you wish to trade is 30:1

For your trading capital this means 30 * 100 EUR = 3,000 EUR to trade (instead of 100 EUR).

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Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.