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 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.
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%, for a leverage on your initial outlay of as much as 700:1. Please see the Leverage Example for more details.
You should of course note that, without proper risk management, a high degree of leverage can lead to large losses as well as gains.