VI, and here is some kerosene which is put on the global financial oven. Amazing...how can people get away with that.
I always viewed Globex 1.6% margin (0.8% intraday) as generous to traders and found IBs 2 to 5% margin a bit more restrictive...
I wonder how long they survive. Lots of ads on forex related sites. The company is, fwiw, located in Cyprus.
etoro.com
Margin & Leverage
The leverage is the loan you get from your dealer, which enables you to transact quickly and cheaply with a small amount of initial capital. Margin is the minimal cash deposit that you have to put up for the transaction. It covers possible future fx trading losses. (For example, leverage will allow you to buy or sell 10,000 USD with only 25 USD). While leverage enables you more buying power that can increase your potential profit, it can also increase your potential loss. It is highly recommended that you take the time to understand the risks involved while trading in leveraged products.
* eToro’s Approach*: if the above example were to be applied, with eToro you could not lose more than your initial minimal trading amount of 25 USD.
* Last but (certainly) not least
Trading currencies on margin increases your buying power.
If you have 25 USD cash in a margin account whose leverage is 400:1, you could purchase up to 10,000 USD worth of currency because you only have to post 0.25% of the purchase price as collateral.
This means that while initially you had 25 USD cash, you now have 10,000 USD worth of buying power.
However, while more buying power can increase your profits, it can also increase your losses. It is highly recommended that you take the time to understand the risks. Make sure to read the margin agreement, to understand how your margin account works, and to ask questions whenever you come across things that are unclear to you.
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