High leverage brokers enable traders to buy and sell assets without needing to cover the full value of the position. This can be useful for a variety of strategies – especially day trading.
In this guide, we compare the best high leverage brokers for 2025. Read on to explore the best brokers with high leverage, low fees, and supported markets.
The best high leverage brokers list
Here’s a list of the best high-leverage brokers from around the globe for 2025:
- eToro – More than 6,000 instruments and user-friendly copy trading. Leverage of up to 30:1.
- AvaTrade – CFD broker that supports over a thousand markets. Leverage of up to 400:1 is available.
- PrimeXBT – Leading high-leverage trading platform with 1000x leverage on forex. Low minimum deposit.
- XTB – Top high-leverage trading platform with up to 500:1 leverage. 2,200+ global markets are supported.
- Skilling – Low commission trading and spreads from 0.7 pips. Leverage of up to 30:1 for retail customers.
- Vantage – Low fee broker with leverage of up to 1000:1; 49 forex pairs. Minimum deposit is just $50.
- FBS – Trade with leverage of up to 3000:1. Supported markets include forex, stocks, and indices.
- HFM – Over 3,500 trading instruments, including forex, stocks, and indices, with leverage of up to 2000:1.
Disclaimer: Your capital is at risk.
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Best leverage trading platforms reviewed
Now we will review the 8 best high leverage brokers that were listed above. In addition to leverage, we also explore each broker’s fee structure, supported markets, regulatory status, trading tools, and much more.
1. eToro – Leading high-leverage broker with 6,000+ financial instruments and copy trading feature
eToro is a top trading platform that offers up to 400:1 leverage for non-EU clients who access the site’s advanced leverage settings. 30:1 leverage is available for retail traders in the European Union.
This trading margin is reserved for major currency pairs like EUR/USD and GBP/USD. As a multi-asset broker, eToro also supports trading for numerous instruments, including ETFs, commodities, indices, and even cryptocurrencies.
When it comes to CFD stock trading, eToro offers up to 5:1 leverage for all its users and 10:1 leverage for advanced traders. The platform offers real-time share trading from 17 global stock exchanges, covering over 4,500 stocks.
The same leverage limits apply to ETF trades on the platform. Users can choose from a selection of over 400 ETFs, varying depending on the trader’s region.
One key advantage eToro traders have is access to the platform’s copy trading feature. This allows users to copy the portfolios of top traders, allowing beginners to leverage the expertise of others for potential earnings.
If copy trading wasn’t enough, eToro also offers smart portfolios that enable traders to invest in specific market niches and sectors like tech, services, and AI.
Through its proprietary trading platform, eToro provides a user-friendly trading experience for both new and advanced traders. The broker’s dedicated mobile app makes eToro more accessible to the everyday investor.
Additionally, all users can access a demo trading account with $100,000 virtual funds to help them test strategies and better learn the trading platform. With over 33 million users, eToro continues to support the investment goals of its global audience.
Note: eToro doesn’t offer CFD trading in the US.
To learn more about the platform, see our eToro review.
| Number of FX Pairs | 55 |
| Max Leverage | Up to 400:1, depending on the region |
| Other Assets | Stocks, ETFs, Indices, Forex, Commodities, Cryptocurrencies |
| Pricing | Low spread fees, 1% trading fee for crypto |
| Spread for EUR/USD | 1 pip |
| Platforms | Proprietary web trading platform and mobile app |
| Accepts US Clients? | Yes |
| Broker Type | Market maker |
What we like about eToro
- Supports 6,000+ trading instruments, including stocks, ETFs, and crypto
- Up to 400:1 leverage offered based on location
- Copy portfolios and trades of top investors with eToro’s copy trading feature
- Demo account available with $100,000 virtual funds for practice
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this provider. Your capital is at risk.
2. AvaTrade – Heavily regulated broker with support for MT4 and MT5
AvaTrade is one of the best high leverage brokers for MT4 and MT5 accounts. Both of these platforms enable AvaTrade customers to trade commission-free. Spreads are usually competitive, with EUR/USD averaging just 0.9 pips.
The broker also offers its own native trading suite. This supports a wide range of analysis tools and can be accessed online or via the AvaTrade app.
Moreover, AvaTrade even has its own options trading platform. This supports over 40 forex pairs and gold. Outside of the options suite, AvaTrade also supports stocks, ETFs, bonds, commodities, and indices.
AvaTrade will also appeal to traders that wish to automate their strategies. Automated trading is available via AvaSocial, DupliTrade, and Capitalise.ai.
In terms of leverage, limits of up to 400:1 are available to retail clients. However, limits will depend on the trader’s country of residence. For instance, those based in the UK, Europe, or Australia can only access a maximum leverage of 30:1.
Nevertheless, AvaTrade accounts take just seconds to open, and the minimum deposit is $100. AvaTrade also offers a free demo account for those wishing to test the platform before making a deposit.
Read our AvaTrade review for an in-depth look at this broker.
| Number of FX Pairs | 40+ |
| Max Leverage | 400:1 |
| Other Assets | Stocks, ETFs, commodities, indices, cryptocurrencies, bonds, options |
| Pricing | 0% commission on all supported markets |
| Spread for EUR/USD | 0.9 pips |
| Platforms | Proprietary web trading platform and mobile app. Separate platform for options trading. Also supports MT4 and MT5. |
| Accepts US Clients? | No |
| Broker Type | Market maker |
What we like about AvaTrade
- Regulated in nine different jurisdictions
- 0% commission across all supported markets
- Supports MT4 and MT5
76% of retail investor accounts lose money when trading CFDs with this provider.
3. PrimeXBT – Up to 1000x leverage with low minimum deposits
Established in 2018, PrimeXBT is a multi-asset exchange that offers some of the highest leverage in the market. The platform provides upwards of 200x leverage for cryptocurrencies, 100x for indices, 500x for commodities, and 1000x for forex. Over a million traders from over 150 countries use PrimeXBT for their trading tech.
PrimeXBT members benefit from 0% commissions when trading CFDs on forex, indices, and commodities. Spreads start from 0.1%, while overnight or swap fees vary depending on the asset. For example, the EUR/USD forex pair swap fee is 0.0061% of the total value of your position, while the swap fee for the SP500 index is 0.0261%.
The platform provides up to 100:1 leverage on the 11 indices offered. PrimeXBT supports 15 commodities with a 500x maximum leverage, while users can trade the 47 available forex pairs with up to 1,000x leverage. PrimeXBT members can trade from the 38 crypto CFDs with a 0.05% trading fee and a maximum leverage of 200:1.
Users can access PrimeXBT via two award-winning platforms: the WebTrader interface or the PrimeXBT mobile app. WebTrader provides a highly customizable layout and user-friendly interface, while the mobile app offers fast trading speeds and powerful charting tools.
Check out our PrimeXBT review for a comprehensive look at this broker’s offerings.
| Number of FX Pairs | 47 |
| Max Leverage | 1000:1 |
| Other Assets | Forex, indices, commodities, crypto, crypto futures |
| Pricing | Commission-free with spreads |
| Spread for EUR/USD | As low as 0.1 |
| Platforms | WebTrader, Mobile app |
| Accepts US Clients | No |
| Broker Type | Market Maker |
What we like about PrimeXBT
- Start trading with just a $1 minimum deposit
- Up to 1000:1 leverage for trades
- Over 45 forex trading pairs to choose from
Crypto Futures and CFD products are complex financial instruments, and due to leverage, they carry a high risk of rapidly losing money.
4. XTB – Commission-free CFD broker with leverage of up to 500:1
XTB is one of the best high leverage brokers, with limits of up to 500:1 available. This permits up to $500 in trading capital for every $1 risked. The 500:1 limit is available on major forex pairs and most minor forex pairs. Exotics, such as EUR/TRY, can be traded with leverage of up to 40:1. XTB is also ideal for trading commodities with leverage.
Gold comes with limits of up to 500:1 and other commodities at 67:1. XTB also offers leverage of up to 5:1 on stocks. This covers stocks from over a dozen markets, including the US, UK, Italy, and Germany. In addition to offering high leverage limits, XTB is also one of the best brokers for low fees. All supported markets can be traded commission-free, and spreads on major forex pairs start at 0.8 pips.
What’s more, XTB offers fee-free deposits on debit/credit cards and bank wires. The drawback is that Skrill payments attract a fee of 2%. Nevertheless, there is no minimum deposit requirement. We also like XTB for its advanced trading platform, xStation 5. The platform supports high-level charting tools, including dozens of technical indicators.
xStation 5 supports multiple device types, including desktops and smartphones. That said, XTB does not support third-party platforms like MT4 or MT5. XTB does, however, offer a free forex demo account. This is ideal for first-time traders or those looking to test a new trading strategy. Finally, XTB is authorized and regulated in multiple jurisdictions, including the UK, Poland, Spain, and Belize.
For more details check out our full XTB review.
| Number of FX Pairs | 48 |
| Max Leverage | 500:1 |
| Other Assets | Stocks, ETFs, commodities, indices, cryptocurrencies |
| Pricing | 0% commission for all supported markets |
| Spread for EUR/USD | 0.8 pips |
| Platforms | Proprietary web trading platform, desktop software, and mobile app |
| Accepts US Clients? | No |
| Broker Type | Market maker |
What we like about XTB
- Trade over 2,200 global markets with leverage of up to 500:1
- No trading commissions and tight spreads
- Top-notch trading platform xStation 5 supports multiple devices
- Fast and hassle-free registration process
76% of retail investor accounts lose money when trading CFDs with this provider.
5. Skilling – User-friendly CFD broker with low commission trading
Skilling is one of the best high leverage brokers for beginners. Its proprietary web trading platform is user-friendly and its native mobile investment app for iOS and Android is also ideal for newbies.
In terms of commissions, charges start at $35 per million USD traded for EUR/USD. GBP/USD charges $40 per millions USD traded, while other FX pairs are charged at $50 per million. Spot metals start at $35 per million USD. Taker fees (aka commission) on crypto start from 0.1% of the value of the position
Additionally, Skilling has also developed its own copy trading platform that supports over 800 strategies.
This means that Skilling customers can trade passively around the clock. There is also support for MT4 and cTrader, although these platforms are more suitable for experienced traders. When it comes to leverage limits, retail clients are capped at 30:1. Professional clients can get access to leverage as high as 200:1.
More than 900 trading markets are supported by Skilling. This includes stocks, ETFs, forex, commodities, and indices. Over 50 cryptocurrencies are also listed. This covers some of the best altcoins, including Ethereum, XRP, Litecoin, and Bitcoin Cash. The minimum deposit at Skilling is $100, and the platform accepts debit/credit cards, e-wallets, and bank wires.
| Number of FX Pairs | 73 |
| Max Leverage | 200:1 |
| Other Assets | Stocks, commodities, indices, cryptocurrencies |
| Pricing | Commission starts at $35 per million USD traded |
| Spread for EUR/USD | 0.7 pips |
| Platforms | Proprietary web trading platform and mobile app. Also supports MT4 and cTrader. |
| Accepts US Clients? | No |
| Broker Type | Market maker |
What we like about Skilling
- One of the best forex brokers high leverage for beginners
- Supports over 900 markets – including stocks, crypto, and forex
- Offers copy trading tools with over 800 strategies
- Commission for EUR/USD is just $35 per million USD traded
76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
6. Vantage – Low-fee trading platform with spreads from 0.0 pips
Vantage is a popular trading platform that offers super-low fees. That said, specific fees will depend on the chosen account type. For example, those opting for the STP account will have access to 0% commissions on all markets, with spreads starting from 1 pip.
Alternatively, those opening a raw ECN account can trade with spreads of 0.0 pips alongside a commission of $3 per slide. These account types come with a minimum deposit of just $50. There is also a pro ECN account that offers 0.0 pip trading with a lower commission of $1.50 per slide.
But do note this requires a minimum deposit of $10,000. All supported account types come with a high leverage limit of up to 1000:1. This means that a $1,000 position would require a margin of just $1. The Premium Account may unlock leverage up to 2000:1, depending on the jurisdiction.
In terms of supported markets, Vantage supports nearly 50 forex pairs. It also supports indices, ETFs, commodities, and almost 800 global stocks.
We also like that Vantage supports MT4 and MT5. The platform also enables traders to deploy expert advisors (EAs). Those looking to try Vantage without risking any money can open a risk-free demo account.
This comes with $100,000 in virtual trading funds, and it takes just 30 seconds to open. While the demo account is only valid for 30 days, lifetime access is available after making a deposit. Supported payment types include debit/credit cards, Skrill, Neteller, and bank wires.
For more information about this leading high-leverage broker check out our detailed Vantage Markets review.
| Number of FX Pairs | 49 |
| Max Leverage | 1000:1 (2000:1 on the Premium Account) |
| Other Assets | Stocks, ETFs, commodities, indices |
| Pricing | Depends on the account type. Commission-free and zero-spread accounts are available |
| Spread for EUR/USD | From 0.0 pips, depending on the account |
| Platforms | MT4 and MT5 |
| Accepts US Clients? | No |
| Broker Type | ECN, STP, and market maker |
What we like about Vantage
- Leverage of up to 1000:1 available
- Multiple accounts to choose from – including commission-free and zero-spread trading
- Minimum deposit of $50
- Free demo account with $100,000 in virtual trading funds
Trading derivatives carries significant risks
7. FBS – One of the highest leverage brokers with 3000:1 leverage
With limits of up to 3000:1, FBS is one of the best high leverage trading platforms in the market. Put simply, FBS offers $3,000 worth of trading capital for every $1 staked.
This will appeal to those on a budget with a high tolerance for risk. 3000:1 leverage is available on standard accounts. This account type comes with 0% commission trading and floating spreads from 0.5 pips.
Alternatively, cent accounts support leverage of 1000:1, with 0% commissions and spreads from 1 pip. Additionally, FBS also offers ECN accounts, with spreads starting at 0.0 pips on EUR/USD. That said, ECN accounts come with a high commission of $6 per traded lot.
Another drawback with FBS is that the number of supported markets is limited. For example, the platform supports just 36 forex pairs and 11 commodities. Moreover, just 127 stocks and 5 cryptocurrencies are listed. On the flip side, we do like that customer support is offered on a 24/7 basis. Moreover, FBS supports EAs and hedging strategies.
| Number of FX Pairs | 36 |
| Max Leverage | 3000:1 |
| Other Assets | Stocks, commodities, cryptocurrencies, indices |
| Pricing | Depends on the account type. Commission-free and zero-spread accounts are offered. |
| Spread for EUR/USD | From 0.0 pips, depending on the account |
| Platforms | Proprietary mobile app. Desktop and web trading across MT4 and MT5 |
| Accepts US Clients? | No |
| Broker Type | ECN, STP, and Non-Dealing Desk (NDD) |
What we like about FBS
- Highest leverage stock broker – up to 3000:1
- Multiple account types to choose from – including ECNs
- Also supports some of the most promising cryptocurrencies
8. HFM – Popular trading platform with over 2.5 million client accounts
Formerly known as Hot Forex, HFM is a popular trading platform that was launched in 2010. It supports over 2.5 million accounts and manages more than $2 billion worth of client deposits. Over 3,500 markets are available on HFM, including forex, commodities, stocks, bonds, and indices.
HFM also supports cryptocurrency trading, with leverage of up to 10:1. This includes some of the best utility tokens, such as Ethereum and BNB.
Other assets come with significantly higher limits. For example, a leverage limit of 2000:1 applies to all the forex pairs it supports across the majors, minors, and exotics. Leverage of 2000:1 is also available when trading gold against the US dollar or euro.
We also like that HFM supports four account types. The cent account offers 0% commission trading with spreads from 1.2 pips. While the zero account offers zero spread trading with commissions of $3 per traded lot. The zero, cent, and premium accounts do not have a minimum deposit requirement. But the pro account requires at least $100.
| Number of FX Pairs | 53 |
| Max Leverage | 2000:1 |
| Other Assets | Stocks, commodities, cryptocurrencies, indices, ETFs, bonds |
| Pricing | Depends on the account type. Commission-free and zero-spread accounts are offered. |
| Spread for EUR/USD | From 0.0 pips, depending on the account |
| Platforms | Proprietary web trading platform mobile app. Also supports MT4 and MT5 |
| Accepts US Clients? | No |
| Broker Type | ECN and STP |
What we like about HFM
- Trade forex and gold with leverage of up to 2000:1
- Supports zero-spread accounts
- Trusted by over 2.5 million clients
Best high leverage forex brokers compared
Below is a summarized overview of some of the best high-leverage brokers:
| Broker | Number of FX pairs | Max leverage | Other tradeable instruments | Pricing | EUR/USD spread | Platforms | Accepts US clients? | Broker type |
| eToro | 55 | Up to 400:1, depending on the region | Stocks, ETFs, Indices, Forex, Commodities, Cryptocurrencies | Low spread fees, 1% trading fee for crypto | 1 pip | Proprietary web trading platform and mobile app | Yes | Market maker |
| AvaTrade | 40 | 400:1 | Stocks, ETFs, commodities, indices, cryptocurrencies, bonds, options | 0% commission on all supported markets | 0.9 pips | Proprietary web trading platform and mobile app. Separate platform for options trading. Also supports MT4 and MT5. | No | Market maker |
| PrimeXBT | 47 | 1000:1 | Forex, Indices, Commodities, Crypto, Crypto Futures | Commission-free with spreads | As low as 0.1 | WebTrader, Mobile app | No | Market Maker |
| XTB | 48 | 500:1 | Stocks, ETFs, commodities, indices, cryptocurrencies | 0% commission for all supported markets | 0.8 pips | Proprietary web trading platform, desktop software, and mobile app | No | Market maker |
| Skilling | 73 | 30:1 | Stocks, commodities, indices, cryptocurrencies | 0% commission for all supported markets | 0.7 pips | Proprietary web trading platform and mobile app. Also supports MT4 and cTrader. | No | Market Maker |
| Vantage | 49 | 1000:1 | Stocks, ETFs, commodities, indices | Depends on the account type. Commission-free and zero-spread accounts are available | From 0.0 pips, depending on the account | MT4 and MT5 | No | ECN, STP, and market maker |
| FBS | 36 | 3000:1 | Stocks, commodities, cryptocurrencies, indices | Depends on the account type. Standard accounts offer commission-free trading. | From 0.0 pips, depending on the account | Proprietary mobile app. Desktop and web trading across MT4 and MT5 | No | ECN, STP, and Non-Dealing Desk (NDD) |
| HFM | 53 | 2000:1 | Stocks, commodities, cryptocurrencies, indices, ETFs, bonds | Depends on the account type. Standard accounts offer commission-free trading. | From 0.0 pips, depending on the account | Proprietary web trading platform mobile app. Also supports MT4 and MT5 | No | ECN and STP |
What is leverage in trading?
Put simply, leverage enables investors to trade with more than they have in their brokerage accounts. Otherwise referred to as margin trading, leverage amplifies the trader’s stake by a certain multiple.
- For example, clients on specific platforms can trade with leverage of up to 30:1.
- This means that a $100 stake can be amplified by 30x
- A $100 stake rises to $3,000
Now let’s consider the outcome of the above example:
- The trader secures gains of 5% on their leveraged position
- On the original $100 stake, that’s gains of just $5
- But with leverage of 30:1, this amplifies the $5 gains to $150
Although leverage increases the risk of loss, it can be a useful way to trade the markets with a small account balance. Moreover, leverage is also popular with day traders, considering the small profit margins that are targeted.
Note: Margin refers to the amount of money or collateral that a trader or investor needs to deposit in their trading account to trade with leverage
How does leverage work in trading
Leverage allows traders to open larger positions with a small amount of capital. When you use leverage, a broker lends you the funds to trade with. For example, if you have 10x leverage and you have an initial investment of $100, the broker will lend you funds so you can trade with $1,000.
To access leverage, you usually need to maintain a certain level of funds in your trading account. If your levels of funds drop, your position will be liquidated.
With leverage, your potential gains or losses will be much greater. Using the example above, say the asset you invested in goes up 10%. If you had just invested $100, your profit would have been $10. With leverage, your profit is now $100, and you will have doubled your initial investment. However, if your asset drops in price by 10%, you will have lost your entire investment. Without leverage, you would have only lost $10.
High Leverage Definition
The term ‘high leverage’ is subjective, as limits will vary greatly depending on the asset, market, and location of the trader.
For example, retail customers in the UK, Europe, and Australia can legally only trade with leverage of up to 30:1con major forex pairs. The same nationalities can access leverage of 20:1 on minors and gold, 30:1 on indices and other commodities, and 5:1 on stocks. That means you won’t find brokers with unlimited leverage in these jurisdictions.
Those in the US can trade forex with leverage of up to 50:1. Although minors and exotics are capped at 20:1. The best forex brokers with high leverage for US clients are Forex.com and Interactive Brokers.
That said, traders in the vast majority of countries have no leverage restrictions. As such, the amount of leverage available is determined by the broker. For example, some of the best offshore ECN brokers with high leverage include FBS and HFM. These platforms offer leverage of up to 3000:1 and 2000:1, respectively.
The different types of leverage explained
Some brokers will let you set your own leverage, while others will have a few options available. Here are some of the most common levels of leverage available:
- 5:1 – This means you can open positions that are 5 times larger than your margin or account. So, with an account of $10, you can trade with $50.
- 30:1 – The legal forex limit for retail customers in the UK, Europe, and Australia. This means that you can open a position 30 times larger than your account.
- 100:1 – This means you can open positions that are 100 times larger than your margin or account. So, for a margin of $10, you can trade with $1,000.
- 500:1 – A leverage ratio of 500:1 enables traders to control positions that are 500 times larger than their account balance.
- 2000:1 – A leverage ratio of 2000:1 is extremely high and allows traders to control positions that are 2000 times larger than their account balance. With an initial investment of $10, you can make trades with $20,000 in borrowed funds.
Note: Leverage carries inherent risk, and the higher your leverage, the higher your risk. Any potential losses will be amplified by your leverage amount.
What trades can you make with high leverage
High leverage can be used in various trades across different markets. However, different trades may have restrictions on the amount of leverage depending on your country of residence. Here are some examples of trades commonly made with high leverage:
- Stocks
- Forex (foreign exchange)
- Cryptocurrency
- Commodities
- Indices
- Futures
- Options
What to look for in a high leverage broker
When choosing a high-leverage broker, there are some important factors to consider.
Regulation and security
High leverage brokers should have a license from a reputable financial authority. You should also look at the regulations for your country of residence. Brokers should comply with relevant regulations and have a high level of security to protect your funds.
Leverage options
As we’ve covered above, different brokers will have different levels of leverage. For retail clients, there will be lower limits than for professional accounts. You should research to find brokers with the best leverage options that match your risk tolerance and trading strategy.
Markets and instruments
Another important consideration is the markets and tradeable assets. Some brokers may specialize in forex, while others will have a range of assets, including currencies, commodities, cryptocurrencies, and stocks.
Customer support
Good customer support is essential. Look at reviews to see if they have a reputation for assisting customers. As high leverage trading has a high level of risk, this can be vital if anything goes wrong.
Trading tools and features
Evaluate the platform’s features, trading tools, analytics, and order execution capabilities. This will help you trade efficiently.
Account types and minimum deposit
Some brokers will have a high minimum deposit. You should also look at the different account types offered to choose a broker that suits your trading needs and financial capabilities.
Fees
Review the broker’s fee structure, including spreads, commissions, overnight financing charges, and withdrawal fees. High leverage brokers may compensate for lower margin requirements with higher spreads, so consider the overall cost of trading.
While fees are important, you should consider all the other factors and not just look for the cheapest broker.
Reputation and reviews
read through customer reviews and feedback to learn about others’ experiences. Good signs are positive experiences, reliable executions, transparency, positive interaction with customer support, and prompt replies from the broker.
How we choose the best high leverage brokers
At Techopedia, we strive to provide the best quality advice and choose the best high leverage brokers by conducting comprehensive research and considering various factors. Our selection process involves a meticulous evaluation of several criteria.
We looked at the reputation and credibility of each broker, considering elements such as user reviews., industry reputation and track record. We also analyzed the platform’s features, functionalities, and ease of use to find platforms that would suit the needs of different types of traders.
Additionally, we examined factors like security, customer support, fee structures, supported assets, and leverage options.
Benefits of trading with high leverage
The overriding benefit of trading with leverage is that it amplifies successful positions. This will appeal to those on a budget, as well as day traders targeting small profit margins.
Now let’s explore some of the key benefits of trading with leverage and who it might appeal to:
Low amount of trading capital
Many traders are unable to enter the market because of a lack of trading capital. For example, those with an account balance of $100 are unlikely to make suitable gains to make the process worthwhile.
That said, trading with a high leverage broker enables traders to access a much larger amount of capital. XTB, offers leverage of up to 500:1. This amplifies a $100 balance to $50,000.
Small day trading margins
Leverage is also beneficial to day traders. This is because day traders target very small profit margins. After all, positions often remain in place for just a few hours or minutes.
- For example, consider a day trader that makes 0.5% on a EUR/USD position
- Let’s say the trader risked $1,000 on the trade – meaning they make just $5
- However, with leverage of 100:1, this amplifies the gains to $500
Just like day trading, leverage is also popular with scalpers. This is an even shorter-term strategy that targets micro-percentage gains. If you’re interested, we have a detailed guide on the best day trading platforms for those looking to engage in short-term trading.
Confident positions
There will often be times when traders are extremely confident in their market speculation. In this instance, traders might want to amplify the amount they invest. Once again, this is where leverage can assist.
For example, when oil hit lows of under $19 per barrel in 2020, many traders entered long-leveraged positions. This is because many traders were confident that oil prices would eventually recover once COVID-related travel restrictions were lifted.
Risks of high leverage trading
When trading with leverage, the position can be liquidated if it declines by a certain amount. This means the trader will lose their entire stake.
Traders should also consider the risks when trading with high levels of leverage:
Liquidation
The main risk when trading with leverage is that the position is liquidated by the broker. This will happen if the trade value declines by a certain amount.
- For example, let’s suppose a trader enters a $500 position with leverage of 20:1.
- This means the $500 position is amplified to $10,000.
- In turn, the trader is only putting up 5% of the total position value
- If the trade declines by 5%, it will be liquidated by the broker
- This means the trader will lose their entire $500 stake
Now consider the risks of liquidation when trading with leverage of 2000:1. This means the position only needs to decline by 0.03% for the trade to be liquidated.
And hence, the higher the leverage multiple – the higher the risk.
Negative balance
Depending on the broker and account type, traders should also consider the risks of their balance going into negative territory.
This can happen if the trade witnesses rapid volatility and the broker does not liquidate the position. In turn, a negative balance will mean the trader owes the brokerage money.
This can be disastrous for those unable to pay the debt. Fortunately, many of the best high leverage brokers discussed today offer ‘negative balance protection’.
As the name suggests, this ensures the account balance never falls below $0.
Things to bear in mind before trading with leverage
In addition to the risks discussed above, there are other considerations to make before trading with leverage.
First, it is important to remember that leverage limits are determined by various factors, including:
- The asset being traded
- The trader’s country of residence
- Whether the trader is a retail or professional client
- The chosen broker
For example, we mentioned earlier that retail clients in the UK, Europe, and Australia are capped at the leverage of 30:1. But this limit is only available when trading major forex pairs. Other assets come with lower limits. For instance, stocks can be traded at 5:1.
However, most nationalities are not bound by the same restrictions. This means that brokers that offer high leverage, like XTB and Vantage, offer leverage of up to 500:1 and 1000:1, respectively. You can find such platforms by exploring the best forex brokers.
Another consideration to make when trading with leverage is the additional fees. This is because leverage is essentially a loan from the broker. As such, interest on the loan must be paid.
This is known as ‘overnight financing’, also referred to as ‘swap fees’. Put simply, leverage fees will need to be paid for each day that the position remains open. This is usually implemented at a certain timeframe.
That said, day traders will not need to worry about overnight financing fees. This is because day traders exit all open positions before the markets close, making it a more cost-effective option when exploring brokerage services for first-time traders.
How We Rate Brokers
We manually review the brokers on our list. Below are the key metrics we check before listing online brokers on the website. For further details, you can also take a look at our online brokers rating guide, featured on ValueWalk.
Regulations
Trading conditions
Trading products and platforms
Customer support
Education center
Conclusion
In summary, leverage is a powerful yet risky tool that allows traders to magnify their positions. The permitted leverage limits vary based on the trader’s jurisdiction and the specific asset being traded.
Among the brokers for CFD trading we reviewed, eToro stands out as the best high-leverage option for beginners. It offers access to over 6,000 trading instruments and features copy trading, which can be particularly useful for those just starting out.
High leverage is also available on forex pairs, offering more flexibility for experienced investors through top-rated MT5 brokers.
However, keep in mind that CFDs are complex instruments and carry a high risk of rapid losses due to leverage. In fact, 76% of retail investor accounts lose money when trading CFDs with this provider.
FAQs
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References
- https://register.fca.org.uk/s/search?q=583263&type=Companies
- https://brokercheck.finra.org/firm/summary/298361
- https://www.cysec.gov.cy/en-GB/entities/investment-firms/cypriot/37683/
- https://asic.gov.au/
- https://www.fca.org.uk/news/press-releases/fca-confirms-permanent-restrictions-sale-cfds-and-cfd-options-retail-consumers
- https://ctrader.com/
- https://coinmarketcap.com/alexandria/article/what-is-an-oco-order-one-cancels-the-other
- https://www.bloomberg.com/quote/EURUSD:CUR
- https://www.fca.org.uk/publications/policy-statements/ps19-18-restricting-contract-difference-products#:~:text=Limit%20leverage%20to%20between%2030,positions%20on%20their%20CFD%20account.
- https://edition.cnn.com/2020/04/17/business/oil-prices-crash-opec-trump/index.html
- https://academy.binance.com/en/glossary/forced-liquidation
