Leverage & Margin
KVB offers tight spreads, fast execution and leverage up to 1:1000 depending on your trading preferences and account type.
Leverage is a financial tool that enables traders to gain significantly more exposure in the market with a comparatively small amount of capital. Using leverage means controlling a larger amount of money by borrowing capital from a broker.
Trading with leverage in forex can amplify profits when markets move in your favor — but leverage is a two-way street, and losses are also magnified.
Leverage example
| Deposit (Margin) | Leverage Ratio | Exposure | |
|---|---|---|---|
| Example | $1,000 | 1:100 | $100,000 |
What is Leverage and How to Use It?
Leverage allows you to open positions larger than your account balance would otherwise permit. KVB offers leverage up to 1:1000 on eligible account types.
It is crucial to understand leverage before using it in live trading. If you feel confident and ready, review our account types for maximum leverage options.
Example of Forex Trading with Leverage
Suppose you have $1,000 and open a margin account to trade CFDs. While you can enter the market with $1,000, you may want to control more capital to seek greater opportunity.
After depositing $1,000, you choose 1:100 leverage: $1,000 × 100 = $100,000 notional exposure. The $1,000 deposited to initiate the position is known as margin.
What is Margin in Forex Trading?
Margin is the amount you deposit to open a position and use leverage. KVB requires a minimum of 0.1% margin — in other words, the maximum leverage ratio we offer is 1:1000.
Key margin terms
Margin Requirement
The amount of money required to open a position.
Account Balance
The total amount in your trading account.
Equity
Your balance plus any profits or losses from open positions. Equity determines your margin level.
Usable Margin
Funds available to open new positions.
Used Margin
Funds currently allocated to maintain open positions.
Margin Call
A warning when margin level falls below the required threshold. You may need to deposit additional funds to keep positions open.
FAQs
Used Margin > Equity = Margin Call. A margin call is a notification your broker sends when your margin level has dropped below a predetermined amount. It warns you about the risk of your positions being liquidated. You may be required to deposit funds upon receiving a margin call.
Margin calculation is typically based on the leverage ratio you choose and the size of the contract you wish to trade. Margin = Contract size / Leverage ratio.
Leverage ratio refers to the ratio between the borrowed capital and your own capital. It allows you to use more capital in the market than you actually deposited.