Maximum Leverage

DEFINITION of 'Maximum Leverage '

The maximum size of a trading position permitted through a leveraged account. Typical leverage available on currency trades through forex trading institutions ranges from 50 to 400 times. With a leverage ratio of 50, an individual with a margin deposit of $5,000 can initiate a trading position of up to $250,000.

BREAKING DOWN 'Maximum Leverage '

Exceeding or even getting close to the maximum leverage point can be an untenable situation for forex traders, since a small price movement can quickly wipe out the entire amount of equity in the trading account.

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    The concept of leverage is used by both investors and companies. Investors use leverage to significantly increase the returns ... Read Answer >>
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    Learn about what other forms of leverage exist for businesses besides operational leverage, and the primary leverage metrics ... Read Answer >>
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