What is Leverage?
Leverage: A ratio that lets you open a position larger than your balance, such as 1:30, which controls 30 times the margin set aside, magnifying both profits and losses.
More terms
- Hedging
- Opening a position that offsets an existing trade or investment to reduce the possible loss if the price moves the wrong way.
- Islamic account
- A trading account with no overnight swap charges on positions held past the trading day; some brokers charge an administration fee instead.
- KYC
- The check a regulated broker makes of your identity and address before activating your account or withdrawals, under anti-money-laundering r...
- Limit order
- An order that fills only at the price you set or better, such as buying once the price drops to a chosen level.
- Liquidity
- How easily an instrument can be bought or sold quickly without moving its price; the more liquid it is, the tighter the spread.
- Long / Short
- Going long is betting the price will rise and going short is betting it will fall; CFDs and forex let you do both.