High Leverage is a concept that is used by almost all Forex brokers that operated in jurisdictions with less regulatory requirements. Leverage is a form of loan that is used by investors to increase their returns on their investment significantly. They use many tools to leverage investments such as futures, margin accounts and options.

What is High Leverage?

High leverage is loans that traders use, in order to gain more profit and bigger returns. As a trader, it is best to have an average leverage level that permits the trader to be responsible for large trading sizes with the minimum amount of capital or funds. With high leverage Forex brokers, the high leverage is a form of attraction for traders to invest with them.

There are specific regulations and conditions to leverage with prestigious brokers. As an example, any Forex broker who is registered under the European Securities and Markets Authority (ESMA) have strict instructions to abide by, where they need to have a maximum leverage level of 1:30. According to an official statement from the ESMA, the maximum leverage level will consist of: “30:1 for major currency pairs; 20:1 for non-major currency pairs, gold and major indices; 10:1 for commodities other than gold and non-major equity indices; 5:1 for individual equities and other reference values; 2:1 for cryptocurrencies.”

 

 

Using Leverage in Forex Trading

In Forex Trading, leverage is used by investors to earn profit from the exchange rate fluctuation in different countries. The leverage works through obtaining a loan from the broker handling the trader’s account. This capital works as a source of funding that can expand the asset base, potentially leading to bigger returns. However, it does magnify the risk of loss too. Using leverage is very popular and even corporate and big companies use it to generate increased wealth.

 

High Leverage Forex Brokers List

There are many high leverage Forex brokers that could be ideal for you, as a trader. The three main high leverage FX brokers are XM, OctaFX, and AvaTrade. With XM, they offer a maximum leverage level of 1:888, while AvaTrade provides traders with a maximum leverage level of 1:400. Finally, OctaFX offers traders with a maximum leverage level of 1:500.

Broker
Description
Trade Now
Octafx
OctaFX
Regulation: CySec
Min. Deposit: $/€/£ 5
Leverage: 1:500
Spreads: Low as 0.4 pips

Review


FP Markets
FP Markets

Regulation: ASIC, CySEC
Min. Deposit: $/€/£ 100
Leverage: 1:500
Spreads: Ultra Tight from 0.0 pips

Review


NSBroker
NSBroker
Regulation: MSFA, BaFin, FCA,
Min. Deposit: $250
Leverage: 1:100
Spreads: Low as 1.2 pips

Review
XM
XM
Regulation: CySEC,FCA,ASIC
Min. Deposit: $/€/£ 5
Leverage: 1:500
Spreads: Low as 0.1 pips

Review
Avatrade
Avatrade
Regulation: ASIC,JFSA,FSCA
Min. Deposit: $/€/£ 250
Leverage: 1:400
Spreads: Floating from 1 pip

Review


IC Markets
IC Markets
Regulation: ASIC
Min. Deposit: $/€/£ 200
Leverage: 1:500
Spreads: Low as 0.0 pips

Review


Etoro
Etoro
Regulation: CySEC,FCA,ASIC
Min. Deposit: $/€/£ 200
Leverage: 1:30
Spreads: Variable

Review

XTB
XTB
Regulation: FCA
Min. Deposit: $/€/£ 250
Leverage: 1:30
Spreads: Low as 0.1 pips

Review


IQOption
IQOption


Regulation: CySec
Min. Deposit: $/€/£ 10
Leverage: 1:1000
Spreads: Floating from 1 pip

Review


OlympTrade
OlympTrade
Regulation: IFC
Min. Deposit: $/€/£ 10
Leverage: 1:500
Spreads: Low as 0.0 pips

Review
Globex360
GlobeX360
Regulation: FSCA
Min. Deposit: No min Deposit
Leverage: 1:500
Spreads: Low as 1.6 pips

Review

 

Leverage in Numbers

When a trader opens a margin account, the usual amount of leverage is around 50:1, 100:1 or even 200:1. But, what do these numbers mean? Let’s start with a 50:1 ratio. This means that lowest margin requirement is 1/50, or 2%, of available trade as cash in the account, whereas a 100:1 ratio means that the trader needs to have a minimum of 1%.

To trade $50,000 currency with a 1% margin, investors will only need to deposit $500 into the account. This is a leverage of 100:1. This is much better than other leverage ratios such as the 2:1 equities ratio or the 15:1 futures market ratio. The Forex leverage may appear very risky but if you consider that prices of currencies usually only change by a maximum of 1% over the course of trading within a day, it is not as risky as it may first appear. If currencies were to fluctuate on a similar level as equities, the Forex brokers wouldn’t be able to offer such high leverage ratios.

Advantages of High Leverage FX Brokers

With high leverage, there are four very essential advantages that every trader must consider when selecting a broker to trade with. The first advantage is that traders have the option of additional or extra loan capital, which means that there is an add-on to any current loan a trader makes with the broker of high leverage. The second advantage is that traders will find it easier to enter into bigger trading positions; this would result with the trader being able to gain more profits.  The third benefit, and most advantageous for traders, is that the leveraged capital for trading is without interest. Traders won’t have to worry about paying back the leveraged capital with interest, since there is none. The final advantage is that high leverage brokers give traders the option to enter into any trading session, with a low capital and simultaneously not have to worry about the return interest.

Can Leverage Backfire?

High leverages can backfire, yes. If one of your currencies moves in the ‘wrong’ direction to what you predicted, the leverage amplifies the loss. In order to avoid such catastrophes, Forex traders usually follow a trading style that includes stop orders or limit orders, which are put in place to control potential loss.

In Conclusion

The Forex market is famous for having high leverage. The highest leverages are in excess of even 1:3000. This presents the opportunity to open positions with small amounts of funds and can allow traders to open up more trades at the same time. Some Forex regulators have limits on the leverages that are permitted with currency pairs to 1:50 or 1:25. Those with higher leverages may not be available to residents of different territories or countries, depending on the regulators of that country. European brokers complying with the restrictions imposed by the ESMA restrict leverages to a maximum of 1:30 on the major pairs. However, these brokers often have offshore divisions where traders can open accounts that have higher leverages but are essentially a part of the same company. Despite this, traders need to be aware of the double-edged sword of high leverages. They can offer great profit potential, but this is held against the risk of greater potential losses.

High leverage is loans that traders use, in order to gain more profit and bigger returns. With high leverage Forex brokers, the high leverage is a form of attraction for traders to invest with them. There are many high leverage Forex brokers that could be ideal for you, as a trader. The three main high leverage FX brokers are XM, OctaFX, and AvaTrade. One of the key advantages of having a high leverage FX broker is that returning the loan is interest-free, and traders won’t have to worry about additional costs. However, the drawback that comes with high leverage brokers is that it can lead a trader to trade recklessly and thoughtlessly.