Leverage
Trading OTC Forex products on margin helps you make the most of your capital. Using Stop Orders* you can customize the leverage on your position based on the stop order you place.
The standard margin requirement to open an OTC Forex position with IG Markets is just 1%. This means that for a single contract on USD/JPY worth $100,000, for example, you would need to outlay a deposit of just ($100,000 x 1%) = $1000. This represents leverage of 100:1.
Boosting leverage with Stop Orders
Because of the way we determine our margin requirements you can gain exceptional leverage with IG Markets.
Our margin requirement will decrease when you attach a Stop Order to your position, as you are effectively decreasing your level of risk. The closer your Stop is to the current market level, the more the margin requirement will be reduced. And a lower margin requirement means a greater degree of leverage on your capital.In this way you can reduce your margin requirement with IG Markets to as little as 0.14%.
Additionally, IG Markets offers Guaranteed Stops to further enhance your risk management strategy. Please refer to the Guaranteed Stops section of our website for more information on this risk management tool.
You should of course note that, without proper risk management, a high degree of leverage can lead to large losses as well as gains.
*A stop order may not limit your risk in times of rapid market movement. In such cases the market may move through your stop in which case your order will be filled at the best available price.