Leverage & Margin

LEVERAGE

The use of leverage allows traders to leverage their trading and take positions to a higher value than the money they deposit originally.

At Ascot Prime we all leverage of up to 1:400 is given to our clients. This means that with just $1,000 investment, you could trade up to $400,000 worth of base currency. Of course, you would be leveraging yourself too much and would be immediately stopped out. Traders only require a small amount of capital in order to take a much larger position in the market. If the market position taken by the trader happens to incur heavy losses, and your losses cause the balance of your trading account to fall, your broker may then close your market positions. The deposit is essentially a deposit against potential unlimited losses.

The ‘Leverage’ refers to where a trader effectively borrows money from the Forex brokerage firm and uses that money specifically for trading in the Forex market.

Ascot Prime offer up to 1:400 leverage and it is common to find brokerage firms offering ratios of over 1:100. Leveraging is all about profit maximization as well as risk minimization.

With leverage, the Forex trader is able to profit more with each trade that he makes. At the same time, the risk factor of his transaction is also multiplied many times over, and there is a greater need for proper risk management.

MARGIN

Before a trader can capitalize on the leveraging factor with forex and CFD trading, he needs to first put up margin. Only once a trader has fulfilled the margin requirements can he then place an order much larger than he has in his trading account.

In the event of trading losses, when the funds in the trading account fall below the margin requirements, the broker may then close some or all of the trader’s positions to make up for the shortfall. When the trader is close to margin, he/she will receive a ‘Margin Call’ from the broker. This is merely a warning to the client that they are very close to being stopped out.

For example, if a trader has $10,000 in his trading account, this means that he has $10,000 of margin. Suppose he uses $6,000 to buy several lots of a currency pair, this would mean that he has $4,000 of usable margin remaining. The trader can lose up to $4,000, (ie Equity at $6,000 level) before the broker will advise the client that he is on Margin Call. Should the positions continue against the client and the client sees his Equity drop to $3,000 then the client may be stopped out. This is 50% Margin Level in MT4 terms.

Payment Options

Broker Awards

AscotPrime is leading the way in the foreign exchange online trading market with a focus on providing unparalleled trading service in currencies, commodities and indices.

Best GCC FX Service
Provider 2019

Online Personal Wealth Awards
Best FX Provider 2019

Best Newcomer
Broker 2019