Leverage & Margin
Trade Forex with 1:100 Leverage at KVB!
Experience tight spreads, swift execution, and cutting-edge platforms, with leverage up to 1:100. Choose from 38+ products to match your trading goals and strategies!
What is Leverage and How to Use it Effectively?
Leverage is a powerful financial tool that allows traders to control larger positions in the market with a smaller amount of capital.
In forex trading, leverage can amplify your profits when the market moves in your favor. However, it also increases the potential for losses if the market moves against you, making it important to manage risk carefully.
Deposit (Margin)
Leverage Ratio
Exposure
$1,000
1:100
$100,000
How Leverage Works in Forex Trading
Let's assume you have $1,000 in your wallet and you wish to use it in Forex markets. You opened a margin account to trade Stocks with a broker. While you can enter the market with your $1,000 depending on your account type or the broker you work with, you may want to control more than that to make more profit.
However, depending on the type of account and the broker you choose, you may want to use leverage to control a larger position, increasing your potential for profit.
After depositing $1,000 into your trading account, you can amplify your position using leverage. For example, if you choose a leverage ratio of 1:100, your $1,000 is effectively multiplied by 100, giving you control over $100,000 in the market. This means you're trading with 100 times the amount of your initial deposit.
The $1,000 you put down to open a position is called your margin.
What Is Margin in Forex Trading and How Does It Work?
Margin is the amount you need to deposit in order to open a position and utilize leverage. At KVB, we provide a fixed margin requirement, meaning with a leverage ratio of 1:100, you can control a position worth 100 times your deposit!
Margin Requirement
The amount of money required to open a position.
Account Balance
The total amount in your trading account.
Equity
Often confused with the account balance, equity refers to your balance plus any profits or losses from open positions. If you don't have an open position, your account balance equals equity.
Usable Margin
The money in your account that you can use to open new positions.
Used Margin
The total amount that the broker has locked up to keep your positions open.
Margin Call
A notification you receive from your broker if your capital is depleted below the required margin level.
Trade with KVB, Choose Leverage up to 1:100
Trade with 1:100 leverage at KVB, but first ensure you have a strong understanding of leverage trading.
If you're confident in your skills, it's time to open a live account and explore the full potential of leverage. Check our account options for maximum leverage and get started today!
FAQs
What is margin call in forex?
Used Margin > Equity = Margin Call
A margin call is a notification your broker sends when your margin level has dropped below a predetermined amount. It warns you about the risk of your positions being liquidated.
In order to keep your positions open, you may be required to deposit funds into your account upon receiving a margin call.
You can reduce the chance of margin calls by implementing risk management techniques as well as educating yourself on how markets work.
A margin call is a notification your broker sends when your margin level has dropped below a predetermined amount. It warns you about the risk of your positions being liquidated.
In order to keep your positions open, you may be required to deposit funds into your account upon receiving a margin call.
You can reduce the chance of margin calls by implementing risk management techniques as well as educating yourself on how markets work.
How is margin calculated in forex trading?
Margin calculation is typically based on the leverage ratio you choose and the size of the contract you wish to trade. Margin = Contract size / Leverage ratio.
What is leverage ratio?
Leverage ratio refers to the ratio between the borrowed capital and your own capital. It allows you to use more capital in your trades but also increases risk.
Are there limits on margin levels?
Yes, KVB sets minimum margin levels. If your account funds fall below this level, it may trigger a margin call to reduce risk.
What is the relationship between margin and losses?
Margin is closely related to losses. If your trades incur losses that exceed the margin in your account, you may face additional losses or even account liquidation.