Margin & Leverage

Margin & Leverage Explain

  • Flexible leverage up to 1:500
  • Negative balance protection
  • Real-time risk exposure monitoring
  • No changes in margin overnight or over weekends

Flexible Leverage up to 1:500

Regardless of your country of origin, you can trade using the same margin requirements and leverage up to 1:500.

About Margin

Margin is the amount of collateral to cover any credit risks arising during your trading operations.

Margin is expressed as the percentage of a position size (e.g. 5% or 1%). On a 1% margin, for instance, a position of $1,000,000 will require a deposit of $10,000.

About Leverage

Using leverage means that you can trade positions that exceed the size of the funds available in your Trading Account. Leverage amount is expressed as a ratio, e.g. 50:1, 100:1, or 500:1. Assuming that you have $1,000 in your Trading Account and you trade ticket sizes of 500,000 USD/JPY, your leverage will equate to 500:1.

How would it be possible to trade 500 times the amount you have at your disposal? At EssenceFX you have a free short-term credit allowance whenever you trade on margin. This enables you to purchase an amount that exceeds your account value. Without this allowance, you would only be able to buy or sell tickets of $1,000 at a time.

Leverage

For any Trading Account, you can select your leverage on a scale from 1:1 to 1:500. Margin requirements do not change during the week, nor do they widen overnight or over weekends. EssenceFX also affords you the option to increase or decrease your chosen leverage.

Leverage Risk

By using leverage, you can make considerable profit even from a relatively small initial investment. However, your losses can also become drastic if you fail to apply proper risk management techniques.

This is why EssenceFX provides a leverage range that helps you choose your preferred risk level. At the same time, we do not recommend trading close to a leverage of 1:500 due to the high risk it involves.

Margin Monitoring

At EssenceFX, you can control your real-time risk exposure by monitoring your used and free margin.

Used and free margin together make up your equity. Used margin refers to the amount of money you need to deposit to hold the trade (e.g. if you set your account at a leverage of 100:1, the margin that you will need to set aside is 1% of your trade size). Free margin is the amount of money you have left in your Trading Account, and it fluctuates according to your account equity. You can open additional positions or absorb any losses with it.

Margin Call

Although each Client is fully responsible for monitoring their Trading Account activity, EssenceFX has in place a margin call policy to guarantee that your maximum possible risk does not exceed your account equity at any one time.

As soon as your account equity drops below 100% of the margin needed to maintain your open positions, we will notify you with a margin call. This serves as a warning that you do not have sufficient equity to support open positions.

Should you be accustomed to telephone trading and the Company determines that you cannot maintain your open positions, you may receive a margin call from our dealers advising you to deposit a sufficient amount in order to maintain your open positions.

Stop-Out Level

The stop-out level refers to the equity level at which your open positions get automatically closed. For all Trading Accounts, the stop-out level is 50% margin level.

Fast & Easy Account Opening
Start Trading Live In Few Minutes!