What is Dynamic Leverage?
Imagine a leverage system that adapts to trading conditions. Picture the ability to manage your risk more efficiently while at the same time making sure you get the maximum potential return on your trades. This is Dynamic Leverage, an automatic system which increases leverage on smaller trades and decreases it on larger trades. You no longer need to worry about what amount of leverage is best suited for you. Dynamic Leverage changes according to the volume of your trades!
(Available only for forex trading)
Examples of Dynamic Leverage scenario
NOTIONAL VALUE IN USD* | TOTAL LOT SIZE** | MAX LEVERAGE |
<1 M | 10 LOT | 1000 |
1 - 5 M | 10 - 50 LOT | 500 |
5 - 10 M | 50 - 100 LOT | 200 |
10 - 50 M | 100 - 500 LOT | 100 |
50 M | 500 - 1000 | 50 |
*Notional value is the total value of the positions. It is calculated as the underlying asset's market price multiplied by the contract's specified amount: Volume x Contract size x instrument price
**Approximate value - may vary from currency pair and its notional value.
Example 1:
Client's Leverage | Lot Size | Side | Contract Size | Symbol | Notional Volume | Total Margin |
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1,000 | 20 | SELL | $100,000 | USD/JPY | $2,000,000 | $3000 |
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Calculations |
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| Applied Leverage | Margin Required |
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Band 1 | $1,000,000 | 1,000 | $1,000 |
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Band 2 | $1,000,000 | 500 | $2,000 |
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| Total: | $3,000 |
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Example 2:
Client's Leverage | Lot Size | Side | Contract Size | Symbol | Notional Volume | Total Margin |
500 | 20 | SELL | $100,000 | USD/JPY | $2,000,000 | $4,000 |
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Calculations |
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| Applied Leverage | Margin Required |
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Band 1 | $1,000,000 | 500 | $2,000 |
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Band 2 | $1,000,000 | 500 | $2,000 |
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| Total: | $4,000 |
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Example 3:
Client's Leverage | Lot Size | Side | Contract Size | Symbol | Notional Volume | Total Margin |
1,000 | 20 | SELL | $100,000 | GBP/USD | $2,523,640 | $4,047 |
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| Rate to USD: | 1.26182 |
Calculations |
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| Applied Leverage | Margin Required |
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Band 1 | $1,000,000 | 1,000 | $1,000 |
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Band 2 | $1,523,640 | 500 | $3,047 |
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| Total: | $4,047 |
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Frequently Asked Questions:
What advantage does Dynamic Leverage provide?
Dynamic Leverage allows traders to open positions without worrying that a high leverage could damage their trades or lessen their potential earnings. By adjusting to the traded volume, dynamic leverage allows traders to manage their risk and get the maximum potential return from their trades.
Which assets does Dynamic Leverage apply to?
For now, Dynamic Leverage is only available for currency trading.
Can I still choose my maximum leverage?
Yes. However when trading currencies the Dynamic Leverage system will kick in, adjusting the leverage accordingly depending on the volume of your trades.