Monday, March 9, 2009

200 times more leverage than trading stocks

With stocks, the maximum leverage is 2:1. But when you trade Forex with CMS Forex, you can use up to 400:1 leverage. For example, if you invest $1,000 in stocks, with 2:1 leverage you may buy up to $2,000 worth of shares. However, if you invest $1,000 margin on a foreign currency trade, at 400:1 leverage, you can control up to $400,000 in currencies. Leverage is one of the most appealing and risky factors of the forex market. Traders should note that trading using leverage may increase potential gains as well as losses on any given trade.

No comments:

Post a Comment