Leverage
Borrowed exposure that lets a small deposit (margin) control a much larger position. 30:1 leverage means 1,000 of margin controls 30,000 of exposure; gains and losses are on the full size.
Leverage is the ratio between the size of a position and the margin needed to open it. With 30:1 leverage, a 30,000-euro position needs 1,000 euros of margin, which is 3.33% of the position.
The key point
Profit and loss are calculated on the full position, not the margin. Leverage does not change how much the market moves; it changes how much that move is worth relative to your deposit.
Worked example
You have a 2,000-euro account and open a 60,000-euro EUR/USD position at the maximum 30:1, using all 2,000 euros as margin.
- A 1% move in your favour gains about 600 euros: 30% of the account.
- A 1% move against you loses about 600 euros: 30% of the account.
- A move of about 1.7% against you takes equity to 50% of required margin, and EU and UK rules require the broker to start closing positions. See margin close-out.
EUR/USD moving 1% in a day is not unusual.
Retail limits
Under ESMA and FCA rules, retail CFD leverage is capped at 30:1 for major currency pairs, 20:1 for other pairs, gold and major indices, 10:1 for other commodities and minor indices, 5:1 for shares and 2:1 for crypto. Many brokers outside these regions offer much higher ratios, which increases the speed at which accounts can be lost.
Practical note
The maximum available is not a target. Most risk methods size positions from the stop distance and the amount you are willing to lose, which typically means far less than full leverage. See leverage and margin and the margin calculator.
Not investment advice. This is general information and education, written without knowledge of your circumstances. It is not a recommendation to buy or sell any instrument. Past performance is not a reliable indicator of future results. Trading leveraged products carries a high risk of losing money. Risk warning