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11/29/2024 11:56:29 AM (GMT+1)

Leverage: how does leverage work?

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Leverage is a tool that allows traders to increase their market position by using borrowed funds. This makes it possible to earn profits on larger volumes than would be possible using only their own funds. For example, with a leverage of 1:10, a trader can control an asset worth 10 times more than their own capital.

However, with the increase in profit potential, the risk also grows. If the market moves against the position, losses can also increase significantly. It is important to understand that using leverage requires caution and a good strategy to avoid major losses.


This material was prepared by Khachatur Davtyan, developed and translated by artificial intelligence.



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