Margin and Leverage
The leverage we offer varies depending on what you want to trade, reaching as high as 1:50 on pairs like EURUSD. The maximum leverage available is determined by the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC), based on the liquidity and risk profile of each currency pair, but can be lower depending on current market conditions.
Our margin requirements
Looking to open a leveraged forex trade? See how much margin you need to set aside for each of the pairs we offer and plan your trade accordingly.
What you need to know
You might be new to trading or just a little confused about certain terminology. Either way, we’ve got you covered with all the important things you need to know about margin and leverage.
See Full GlossaryWhat is margin?
Margin is the money you need to have in your account to open a leveraged trade.
Let's say, you deposited $100 and wanted to open a $2,000 trade on USDCAD at 1:50 leverage. The margin required would be 2%. This means you'd need $40 set aside to place your trade. This $40 is known as required margin.
From your original $100 deposit, the $60 you'd have remaining is known as free margin - money in your account that can be used to open new or maintain existing trades. Every time you open a new trade, you have to meet the margin requirement, and your free margin goes down. The margin requirement is also reset daily at a minimum, to reflect the latest currency exchange rates.
Depending on market movements, the margin requirement for your trades may increase or decrease, so always make sure your account is adequately funded.
Now, let's look at a second example where exchange rates come into play.
Imagine you open a position of 100,000 units (or 1 lot) on EURUSD, with a required margin of 2% (or €2,000). At the time of opening the position, your margin was $2,150, meaning the exchange rate for EURUSD was 1.0750. After a margin reset, however, the exchange rate went up by 1%, leading to an equivalent increase in your margin to $2,171.50. Whereas, had the exchange rate decreased by 1%, your margin would have gone down to $2,128.50.
What is leverage?
Leverage acts as a multiplier, allowing you to open larger trades with less of your own money.
If you wanted to open a trade worth $5,000 on USDCAD, with 1:50 leverage, you'd only need to put up $100 of your own money. Keep in mind though, using leverage can lead to added risk and should be well-managed.
What is a margin call?
A margin call is a notification displayed on your trading platform when the money in your account falls below a certain level.
While you won't get a margin call when trading with us, you will be alerted and a notification will be displayed when your funds fall below 120% of the margin needed to maintain your open trades. That'll give you the opportunity to add funds to your account or close some of your positions, to help keep your account balance above the required margin.
What is stop out?
A stop out, also known as a margin closeout, is when your positions are closed automatically because the money in your account falls below a certain level.
To help protect your account, we'll start closing your positions automatically when your funds fall below 100% of the margin needed to maintain them. We'll start by closing the positions with the biggest losses and continue doing so until your account becomes fully margined again.