Leverage in trading allows you to control a larger position in the market with a relatively small amount of capital. It is expressed as a ratio, such as 1:100, meaning you can control $100,000 worth of a position with just $1,000 in margin. While leverage can amplify potential profits, it also increases risk, as losses are also magnified.
How Tiered Leverage Works
Tiered leverage applies different leverage levels depending on the size of a trader’s position. As trade volume increases, leverage is reduced to manage risk more effectively.
For example, consider the following tiered leverage structure we offer for Bitcoin (BTCUSD):
- 0–25 lots: 1:100 leverage
- 25–50 lots: 1:50 leverage
- 50+ lots: 1:20 leverage
If a trader opens a 30-lot position, the leverage is applied in tiers:
- The first 25 lots are leveraged at 1:100.
- The remaining 5 lots are leveraged at 1:50.
If the trader opens a 60-lot position:
- The first 25 lots are leveraged at 1:100.
- The next 25 lots are at 1:50.
- The final 10 lots are at 1:20.
