Monday, November 2, 2009

3.10 Forex Lexicon : Leverage

Leverage is the ratio of the amount used in a transaction 
to the required security deposit (margin). It is the ability
to control large dollar amounts of a security with a
comparatively small amount of capital. Leveraging
varies dramatically with different brokers,
ranging from 10:1 to 100:1. 
Leverage is frequently referred to as gearing. 
The formula for calculating leverage is:

Leverage = 100/Margin Percent

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