Leverage
ForexDefinition
Leverage allows investors to control a larger position than their actual capital would otherwise permit. It is expressed as a ratio, such as 30:1, meaning you can control £30,000 of currency with just £1,000. While leverage amplifies potential profits, it equally amplifies potential losses.
Example in context
With 50:1 leverage and a $1,000 account, a investor can open a $50,000 position — but a 2% move against them would wipe out the entire account.
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