One Comment on "Do stock brokers offer leverage as forex brokers do?"
forexpro1 on Tue, 9th Feb 2010 1:45 am
A stock broker might offer 2:1 leverage, meaning that you would need to have $500 in your account to buy $1,000 worth of stock – in Forex, leverage goes as high as 400:1. At 400:1, you would need to have $250 in your account in order to buy one standard lot of EUR/USD. With a leveraged position, a Forex trader magnifies the potential gains from any price movements, however losses are magnified by the same degree.
High-leverage trading is the essence of what distinguishes retail Forex from other markets. Forex will allow you to make more money with a smaller investment. References :
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forexpro1 on Tue, 9th Feb 2010 1:45 am
A stock broker might offer 2:1 leverage, meaning that you would need to have $500 in your account to buy $1,000 worth of stock – in Forex, leverage goes as high as 400:1. At 400:1, you would need to have $250 in your account in order to buy one standard lot of EUR/USD. With a leveraged position, a Forex trader magnifies the potential gains from any price movements, however losses are magnified by the same degree.
High-leverage trading is the essence of what distinguishes retail Forex from other markets. Forex will allow you to make more money with a smaller investment.
References :