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Fundamental Analysis Trying to understand leverage and risk
avatar Matthew
Question by: Matthew - 17 Nov 2016, 23:28:29
Trying to understand leverage and risk
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Answers (1)
avatar user 11481
Answer by: JustinJones - 17 Nov 2016, 23:32:02

No; leverage represents the proportion of the value of each quantity of currency you trade that the broker is essentially lending you for the purpose of the transaction. If you have 1:100 leverage, you're paying only 1% of the cost of opening a position of any specified size. If you buy one micro-lot of EUR/USD, that's always worth the same $1,000, and its price-movements always represent the same $0.10 per pip to you, regardless of your leverage.

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