Financial Leverage

A double-edged sword in every trader’s arsenal

One of the main mechanisms of online trading is financial leverage. Leverage is the ratio of the amount of capital that a trader invests in an account against funds provided by the broker. To put it simply, it is basically capital borrowed from a broker, which is not being added to your overall account balance but rather allows you to trade with larger volumes than you could have with your own funds.

How the leverage works

It is simple mathematics. If you invest $ 1,000 and the leverage is 1:50, then the amount you have available is equivalent to $ 50,000. If everything goes smoothly, the leverage is an ideal means of accelerating your own profits.

However, keep in mind that in addition to gains, the leverage also accelerates potential losses. Therefore, we recommend beginner traders to handle the leverage carefully, as its reckless use can very quickly lead to an empty trading account.

What financial leverage does Purple Trading offer?

Purple Trading offers financial leverage up to 1:30 for all retail clients and leverage up to 1: 500 for clients who meet the requirements for classification as a professional client (read what these requirements are) and 1:100 for experienced clients.


Overview of financial leverage for individual instruments

 

Instruments

Max Leverage for Retail clients

Max Leverage for Professional clients

Max Leverage for Experienced Retail clients

EUR/USD

1:30

1:500

1:100

GBP/USD

1:30

1:500

1:100

USD/CHF

1:30

1:500

1:100

USD/JPY

1:30

1:500

1:100

EUR/CHF

1:30

1:500

1:100

EUR/GBP

1:30

1:500

1:100

EUR/JPY

1:30

1:500

1:100

USD/CAD

1:30

1:500

1:100

GBP/CAD

1:30

1:500

1:100

EUR/CAD

1:30

1:500

1:100

GBP/CHF

1:30

1:500

1:100

GBP/JPY

1:30

1:500

1:100

CAD/CHF

1:30

1:500

1:100

CAD/JPY

1:30

1:500

1:100

CHF/JPY

1:30

1:500

1:100

EUR/AUD

1:20

1:500

1:100

AUD/CAD

1:20

1:500

1:100

AUD/CHF

1:20

1:500

1:100

AUD/JPY

1:20

1:500

1:100

NZD/JPY

1:20

1:500

1:100

GBP/AUD

1:20

1:500

1:100

GBP/NZD

1:20

1:500

1:100

NZD/USD

1:20

1:500

1:100

AUD/USD

1:20

1:500

1:100

NZD/CAD

1:20

1:500

1:100

NZD/CHF

1:20

1:500

1:100

EUR/NZD

1:20

1:500

1:100

AUD/NZD

1:20

1:500

1:100

EUR/PLN

1:20

1:500

1:100

USD/SEK

1:20

1:500

1:100

EUR/SEK

1:20

1:500

1:100

USD/NOK

1:20

1:500

1:100

EUR/NOK

1:20

1:500

1:100

EUR/HUF

1:20

1:500

1:100

USD/PLN

1:20

1:500

1:100

USD/CZK

1:20

1:500

1:100

EUR/CZK

1:20

1:500

1:100

USD/HUF

1:20

1:500

1:100

USD/SGD

1:20

1:500

1:100

EUR/MXN

1:20

1:500

1:100

USD/MXN

1:20

1:500

1:100

ZAR/JPY

1:20

1:500

1:100

SGD/JPY

1:20

1:500

1:100

EUR/SGD

1:20

1:500

1:100

EUR/ZAR

1:20

1:500

1:100

USD/ZAR

1:20

1:500

1:100

USD/RUB

1:20

1:500

1:100

AUD/SGD

1:20

1:500

1:100

AUD/ZAR

1:20

1:500

1:100

CHF/HUF

1:20

1:500

1:100

CHF/ZAR

1:20

1:500

1:100

EUR/RUB

1:20

1:500

1:100

GBP/SGD

1:20

1:500

1:100

GBP/ZAR

1:20

1:500

1:100

NOK/SEK

1:20

1:500

1:100

NZD/SEK

1:20

1:500

1:100

NZD/SGD

1:20

1:500

1:100

USD/ILS

1:20

1:500

1:100

 

 

 

 

GOLD

1:20

1:100

1:100

SILVER

1:10

1:100

1:10

PLATINUM

1:10

1:20

1:10

PALLADIUM

1:10

1:20

1:10

Crude Oil

1:10

1:20

1:10

Brent

1:5

1:5

1:5

DAX

1:20

1:50

1:50

DOW

1:20

1:50

1:50

S&P

1:20

1:50

1:50

CAC

1:20

1:50

1:50

FTSE

1:20

1:50

1:50

NSDQ

1:20

1:50

1:50

STOXX

1:20

1:50

1:50

ASX

1:20

1:50

1:50

NIKKEI

1:20

1:50

1:50

 

 

 

 

BTC/USD

1:2

1:2

1:2

LTC/USD

1:2

1:2

1:2

ETH/USD

1:2

1:2

1:2

XRP/USD

1:2

1:2

1:2

BCH/USD

1:2

1:2

1:2

Lost in terms?
Take a look at the glossary below:

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Your capital is at risk.
Broker
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A company which offers services connected to trading on financial markets to its clients. Its role is sending trade orders placed by clients into the market for execution.

CapitalGuard
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Protection feature that limits the risk of the investment Strategies provided by Purple Trading at a specific value, which, at the same time, sets the maximum percentage loss for clients’ accounts connected to the Strategy.
CFD - contract for difference
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It is a trading instrument; its value is derived from its underlying instrument, which can be for example a stock index or a future contract. Settlement of this instrument type is always performed financially, therefore the client speculates on future value difference of the underlying instrument while he/she does not become the owner of it.

 
Execution time
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Time between order submitting on the trader’s side and its filling in the market. It is expressed in milliseconds.
Financial leverage
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A mechanism which enables traders to trade larger amounts even with smaller volume of free capital which would otherwise be insufficient for the trade, e.g., when trading 1 lot of currency pair EURUSD with leverage of 1:100, the client has to have at least 1,000 EUR of free capital on his/her trading account. Should the leverage not be used in this scenario, the client would need to have 100,000 USD on his/her trading account to cover the entire traded volume.

 
Liquidity
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Broker’s ability to fill client’s order in the market at the desired value and in the desired volume.
Lot
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The basic unit of traded volume. For currency pairs, it is 100,000 units of the base currency. Lot size varies between individual CFD-type instruments as it is based on the number of contracts set for each one.

 
Pip
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The price expression of currency pairs based on the one-before-last decimal of the quoted price. If the price of EURUSD currency pair changes from 1.17455 to 1.17465 then the price changes by one pip. The same way, if the USDJPY price changes from 110.124 to 110.114 a change by one pip occurs.
Slippage
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A slippage in order filling. It expresses the difference between the asked price at trader’s side and the price at which the order is executed in the market (in market execution, it is the best available price in the market at that time). Slippage can have positive as well as negative value.

 
Swap
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A fee charged for holding a trading position overnight. It is expressed in points or percents and it is directly proportional to the volume of the trading position held. Please note the Swap is being charged 3x on Wednesday night, which includes also the weekend swaps.
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