Leverage is an essential tool that allows traders to control larger trading positions with less capital. However, leverage varies depending on the type of financial instrument and the liquidity provider. Below are the details of leverage usage across different asset classes.
Leverage for Currencies (CFD) Trading
Leverage for Currencies (CFD) pairs is determined when opening an account and is categorized into two main types:
- Major Pairs: Leverage is set when opening an account.
- Minor Pairs: Leverage is set when opening an account.
Leverage for Indices (CFD)
Leverage for indices (CFD) depends on the liquidity provider or can be calculated using the following formula:
Leverage = (Open Price * Lot Size * Contract Size) / Used Margin
- Open Price can be checked when placing an order.
- Lot Size can be adjusted according to your preference.
- Contract Size details can be found on the MT5 platform.
- Used Margin can be observed after opening a position.
Leverage for Cryptocurrencies (CFD)
Leverage for cryptocurrencies (CFD) can be adjusted when opening an account, but it will be divided by the Margin Rate, which is set at 3. The leverage calculation formula is as follows:
Leverage = (Open Price * Lot Size * Contract Size) / Used Margin
Leverage for Stocks (CFD)
Leverage for stocks (CFD) depends on the liquidity provider or can be calculated using the following formula:
Leverage = (Open Price * Lot Size * Contract Size) / Used Margin
- Open Price can be checked when placing an order.
- Lot Size can be adjusted based on your trading strategy.
- Contract Size details can be found on the MT5 platform.
- Used Margin can be checked after opening a position.
Leverage for Metals & Energy (CFD)
Leverage for metals (CFD) and energy (CFD) depends on the settings when opening a trading account. However, an exception applies to USOIL (CFD), which uses a specialized calculation method:
Leverage for USOIL (CFD)= (Open Price * Lot Size * Contract Size) / Used Margin
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