What is The Difference Between Maximum CFD Leverage and Used CFDs Leverage?

You should note that there is a difference between maximum cfd trading leverage ( cfd leverage given by your broker which is the highest cfd leverage you can trade with if you select to) and used cfd trading leverage ( cfd leverage depending on the lots you have opened/open trades). One is broker's (Maximum) & the other is trader's (Used). To explain this concept we shall use the cfd example above:

If your cfd broker has given you 100:1 Maximum cfd leverage, but you only open trading lots of 100,000 dollars then Used cfd leverage is:

100,000 dollars : 10,000 dollars (your money)

10:1 Used CFD Leverage

You have used 10:1 cfd leverage, but your maximum cfd leverage is still 100:1. This means that even if you are given 100:1 Maximum cfd leverage or 200:1 Maximum cfd leverage , you do not have to use all of it. It is best to keep your used cfd leverage to a maximum of 10:1 but you will still select 100:1 maximum leverage option for your cfd trading account. The extra cfd leverage will give you what we call Free CFDs Margin, As long as you have some Free margin on your trading account then your cfds trades will not get closed by your cfd broker because this margin requirement will remain above the required level.

When it comes to cfd trading one of your cfd rules: cfd money management rules on your cfd plan should be to use below 5:1.

CFD Leverage Example

The examples explained below, the set cfds trading leverage ratio is 100:1, the margin which is 1% is $2683.07, therefore the total amount controlled by cfd trader is: $268,307 - this is because with this leverage the trader has used little of his money and borrowed the rest, with this set at 100:1, the trader is using 1 % of their capital, this 1% is equivalent to $2683.07, if 1% is equal to $2683.07 then 100% is $268,307

What is The Difference Between Maximum CFDs Leverage and Used CFD Leverage?

In the above image examples, the trader is using $2683.07, total controlled amount is $268,307, but trading account equity is 16,116.55, therefore used cfds trading leverage is ($268,307 divide by 16,116.55) = 16.64 : 1

16.64 : 1

In the cfds account above even though the maximum cfd leverage set cfd trading leverage is 100:1, Used cfd leverage is 16.64 : 1