Leverage involves borrowing capital from the broker in order to get a greater exposure.
This gives traders more purchasing power to a financial market while only tying up a relatively small amount of capital*
For example a leverage of 20:1 implies that, for every 5 euro you invest, the product provider gives you an exposure of 100 euro (€5 x 20).
To do this, the providers lends you, in economic terms, 95 euro (€100-€5).
The only fee involved with leverage is called a "swap" which is an overnight charge.
The charge is the interest that needs to be paid on the leveraged capital given.
This fee can be avoided by simply closing your trade before the end of the trading day.
All assets leverages are displayed in information on the trading platform:
*Note: Leverage also multiplies the impact of price changes on both profits and losses.
This means profits and/or loses are amplified, therefore, please always consider applying a Stop Loss and/or Take Profit trigger to every trade in order to maximise the returns and minimise the risks respectively.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please click here for the CFDs risk warning which specifies the % of retail investor accounts that lose money on a 12 month period on our platform. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.