Leverage is the leverage or loan from a broker given to a trader, so that the trader funds have greater purchasing power, for example, if there is a $ 100 fund using 1: 100 leverage, the $ 100 has a power equivalent to $ 10,000. If the leverage is 1: 500, then the $ 100 fund has the ability to make transactions equivalent to $ 50,000 or 500 times more than the nominal of the fund itself.
Margin is a guarantee given to a broker every time a position is opened. The size of the margin is influenced by the leverage and the amount of trading volume (lots) opened by the trader. The margin calculation formula is: Leverage x Volume (Lot) x Contract Size. If we don't pay attention to margins, our trading account might get margin call.
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1: 100 leverage means (1/100) x100% = 1 %
leverage 1: 200 means (1/200) x100% = 0.5%
leverage 1: 500 means (1/500) x100% = 0.2%
leverage 1: 600 means (1/600) x100% =?
leverage 1: 1000 means (1/1000) x 100% =? =============================
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