What is leverage?

The term ‘Leverage’ in Forex and CFD trading is being able to trade a larger amount of volume with less investment. To let you control a larger position than your investment, brokers set aside a certain amount as 'collateral'. The leverage is expressed in ratios, such as 30:1 or 5:1. Please keep in mind that the leverage amplifies the price movement. This means proportionally higher profit or loss, depending on the market movement. Therefore, trading CFDs carries a high risk. Please make sure that you understand how CFDs work before starting a live trading account.