In Finance, Leverage is borrowing money to supplement existing funds for investments in such a way that the potential positive or negative outcome is magnified and/or enhanced.
For example, trading on leverage is like buying a home. When you want to buy a house with a mortgage, it means you don’t have enough money to buy the property outright. If you put a 20% deposit on a house worth $200,000 and make regular payments to the bank. You are using a smaller amount of money ($40,000) to control a larger asset ($200,000 house).
In Forex, trading on a leverage allows you to lever up your purchases.
As far as EGM Securities clients are concerned the amount of leverage on their accounts will in part determine the amount of funds they need to put up front for a trade.
At EGM Securities we offer a ‘Fixed Leverage’. FX products have a maximum fixed leverage of 1:400. When you change your account leverage, Major and Minor pairs will reflect that and Exotic pairs and Metals will change in proportion by one-tenth.