Leverage
Trading forex on margin helps you make the most of your capital. Using Stop Orders* you can gain as much as 700:1 leverage on your position.
The standard margin requirement to open a forex position with IG Markets Inc. is just 2%. This means that, for a single contract on, for instance, GBP/USD worth £100,000 you need outlay a deposit of just (£100,000 x 2%) = £2000. This represents leverage of 50:1.
Boosting leverage with Stop Orders
Because of the way we determine our margin requirements you can gain exceptional leverage with IG Markets Inc.
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 Inc. to as little as 0.14%, for a leverage on your initial outlay of as much as 700:1. Please see the Leverage Example for more details.
Additionally, please refer to the Guaranteed Stops section of our website. Guaranteed Stops are a risk management tool offered by IG Markets Inc. that can further enhance your risk management strategy.
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.