**Leverage**

**Leverage **allows you to trade amounts that are larger than your account balance. Your investment amount and the leverage influence your trading results, as well as the opening fees and overnight rollover swaps.

**Example:**

*Let’s assume you go long for EUR/USD, your investment amount is €50 and your multiplier/leverage is 1. If the price goes up 10%, your profit will be €5 (€50x10%). If the price goes down your loss will be €5 (€50x10%).*

*If you specify 20 as a multiplier/leverage instead, if the price goes up your investment amount will be €1,000 (50x20), so if the underlying asset price goes up 10%, you have a profit €100 (€1,000x10%), if the price goes down 10% you will have a loss €100 (€1,000x10%).*

*As you can see, your profit has been multiplied by 20, and this is how the multiplier/leverage works.*

*Still, you've got to remember the multiplier/leverage may magnify both profits and losses, so the higher your multiplier/leverage, the higher the risk.*

**The leverage works differently depending on your categorisation status, Retail or Professional (Pro).**

## Retail Clients

When you open your position, the margin requirements will be based upon the leverage, i.e., the leverage determines your trade amount.

This is why when you set your trade amount and your multiplier/leverage, you should also know the leverage for the asset class in question. With higher leverage, you will need less margin to open your position.

**Example:**

*Let's now assume your account balance is just €10, and you want to invest them into EUR/USD. For major currency pairs, the leverage is 30:1, while the margin requirement is 3.33%. To calculate your maximum trade amount (including multiplier/leverage), you should apply the following formula:*

* *

*Maximum Multiplier/Leverage-Adjusted Amount=Free Margin*

**Max Leverage for the asset class in question*

* *

*In our example, this is €300 (10*30). If you open such a position, €10 will be used as a margin.*

## Professional Clients

Once you get the Professional Client status, you can start trading without leverage. When you open your trade, you are investing your own money, which will be reserved in your account, while no margin will be taken.

**Example:**

Let's now assume your account balance is just €10, and you want to invest them into EUR/USD. To calculate your maximum trade amount (including multiplier/leverage), you should apply the following formula:

Maximum Multiplier/Leverage-Adjusted Amount=Free Funds (not invested into other positions)

*Max Multiplier/Leverage In our case, this is €5000 (10*500).

If you open such a position, €10 will be reserved on your account.

As you can clearly see, Professional Clients can open big trades with the same investment capital.

Both Retail and Professional Clients cannot lose more than the investment amount.

For instance, if your investment amount is €100, and your multiplier/leverage is 30, the total position value will be €3,000 (30*100). In this case, whichever status you have, your losses are limited to €100, your initial investment. Once your losses exceed those €100, your position will be closed through **Stop Out**.