Topics covered in this article:
- What is the Alpari leverage limit?
- What is floating leverage?
- Does our leverage change upon news release?
Leverage is offered by brokers to maximise traders' buying power as they're able to deposit a small amount of funds and trade larger volumes. Leverage is expressed as a ratio, so if it is 1:100 for example, a trader's buying power is magnified 100 times. Leverage provides opportunities for multiplied profits but at the same time, one may have multiplied losses as well.
Leverage essentially enables you to get a larger exposure to the markets than the amount that you've deposited to trade. It's similar to a loan, in that we'll lend you capital to buy even more of an asset. If your trade is successful, your profit will be even bigger. Remember though any losses you experience will be greater too.
What is the Alpari leverage limit?
Alpari offers floating leverage from 1:100 up to 1:3000 on ECN and Pro ECN accounts and up to 1:1000 on Standard account.
Again, this also depends on your account type and the instrument you're trading. More importantly, though, the amount of leverage we offer is based on your personal knowledge and market experience so limits will vary.
What is floating leverage?
Floating leverage or Flexible leverage is a kind of leverage that changes (usually, decreases) as the notional value (i.e. volume of the open positions) increase. This means that the higher the volume of your order, the lower the leverage becomes.
Implication: When the leverage reduces, the margin requirements for your open position will increase.
Example: Assume you open a new position BUY 0.5 lot of USDJPY 139.400 for a USD trading account.
Margin required = Notional Value / Floating leverage
Floating Leverage Calculation Example:
Open Position: Buy 5 lots GBPUSD at 1.27422.
Nominal Value Calculation: 5 × 100,000 × 1.27422 = 637,110 USD
Leverage Applied: Since the nominal value (637,110 USD) does not exceed 700,000 USD, a leverage of 1:1000 is applied.
Margin Calculation: 637,110 / 1,000 = 637.11 USD
Does our leverage change upon news release?
At Alpari, we maintain stable leverage during news releases. Our priority is to provide consistent trading conditions, and we do not typically adjust leverage or margin requirements based on market events or volatility.