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What is leverage?

What is leverage?

Leverage is making use of borrowed funds to make a trade above the limit of your current float. It allows you to make abnormal profits while minimizing the risk on your capital. For example, if you have 1:100 leverage you can execute a buy or sell order of $100,000 with a $1,000 margin deposit. Higher leverage increases the potential of higher profits and also exposes you to huge losses if handled without proper risk management.

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