Leveraged trading, also known as margin trading.
As the name implies, it is the use of a small amount of money to invest several times the original amount in the hope of obtaining a return of several times the volatility of the investment target, or loss. Different trading leverage ratio is different.
If futures are typically 10x leveraged, that is, if the market price moves 10% in the opposite direction from what you expect, you will lose 100% of your money (margin), and if the market moves in the same direction as you expect, you will gain 100%.
With 100 times leverage and a 10 percent change in market price, the investment will gain or lose 1,000 percent.
Because margin (this small amount of money) does not rise or fall in proportion to the volatility of the underlying asset, the risk is high.
Trading, ALSO KNOWN AS trading, refers to the signing with the (designated investment) bank, open a trust investment account, deposit a sum of money (margin) as security, by the (investment) bank (or brokerage) set a credit operating limit (i.e. 20-400 times the leverage effect).
Investors can freely buy and sell the same value of the spot within the quota, and the profit and loss caused by the operation will be automatically deducted or deposited from the above investment account.
Allowing small investors to take advantage of smaller funds, gain access to larger trading quotas, enjoy the same use of global capital as risk-averse, and create profit opportunities in the midst of change.
Leveraged trading of foreign exchange, leverage for 20 times to 400 times, in a standard contract for a $100000 per hand (mean, is the former a currency), if the leverage provided by the broker for 20 times, with the business needs to 5000 yuan (if buying and selling of currency deposit and account currency is different, you need to convert) margin;
If the leverage ratio is 100 times, you need a $1000 margin to buy and sell one hand.
