Monday, November 2, 2009

4.1 Forex Calculus : Leverage and Margin Percent

Some brokers describe their gearing in terms of a leverage ratio
and others in terms of a margin percentage.
The simple relationships between the two terms are:
Leverage = 100 / Margin Percent
Margin Percent = 100 / Leverage

Leverage is conventionally displayed as a ratio, 
such as 20:1 or 50:1.
In the examples that follow which require leverage,
will be use only the number on the left side of the ratio—that is,
20 or 50—since the number on the right side is always 1.

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