Posted by Homi .M on 15 February 2021 11:44 AM

In forex, leverage is a loan provided by the brokers that lets investors trade much more value of a currency. In other words, you can trade more value of a currency with a limited capital. However, leverage is a two-edged mode. As it can increase the profits, it can increase the losses too. So it is the client’s responsibility to be aware of this risk.

To get the word ‘leverage’ clarified, an example is presented: an investor can trade $1000 value of a currency, by depositing only $100. In this case he/she uses the leverage of 1:10.


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