Dynamic Leverage

Dynamic Leverage is an automated model which readjusts account leverage based on USD volume exposure per instrument and direction. As the volume increases on the same direction and instrument, the leverage decreases accordingly.

The following table shows the different scales at which Dynamic Leverage* takes effect for Forex, Metals, Energies.

USD volume Maximum Leverage
up to 10mil(incl) 500
10mil - 20 mil(incl) 200
20 mil - 30 mil(incl) 100
30 mil - 50 mil(incl) 50
above 50 mil 33
TRY 1:100
CHF 1:100
ZAR 1:100
CNH 1:50
THB 1:50
RUB 1:50
DKK 1:25
CZK 1:25
HKD 1:25
SGD 1:25
USD volume Maximum Leverage
up to 1mil (incl) 200
above 5 mil 100

Please note that XPTUSD and XPDUSD have a fixed leverage of 1:14.

USD volume Maximum Leverage
up to 1mil (incl.) 100
1mil - 5 mil (incl.) 40
above 5 mil 20

*For Dynamic Leverage of each instrument please refer to the trading platform symbol information

Please note that Account leverage takes precedence,

As an example, if account leverage is set to 1:200, then for forex, margins will be calculated with 1:200 for USD Volumes up to 10mil and also for USD Volumes 10mil – 20mil, and so on.

If account leverage is set to 1:50, then if trader opens a Metals position, margin will always be calculated at 1:50 as it is lower than both Maximum Leverages offered in Dynamic Leverage.

If the trader, with account leverage 1:50, opens a position in Energies, then margin calculation will use 1:50 up to 1mil USD Volume (incl.) and then continue with the maximum leverages offered at the specified USD Volume limits.

Please note that Indices have a fixed leverage of up to 1:100 and that Shares, iShares and Powershares a leverage of up to 1:10.

Opening Trades

Opening trades on different instruments, or on a different direction on the same instrument, will not affect dynamic leverage.

Example:

If you open a 101 lots Buy position on USDCAD, your margin will be calculated using 1:500 leverage for 100 lots, as the USD volume is 10 million USD (as calculated on the base currency of the traded pair) and the remaining 1 lot will be calculated using 1:200.

If then you open a position on any other instrument, for example, 10 Lot EURUSD Buy, the new position will be calculated using 1:500 leverage as it is a different instrument and below the 10 million USD volume limit.

If you open 10 lots Sell USDCAD, again the margin will be calculated using 1:500, without affecting the original 100 Lots Buy USDCAD, even though it is the same instrument, because the position is on a different direction.

In the above case, if the USD volume of the EURUSD Buy (or USDCAD Sell) trade goes above the volume limits (respectively) by opening more positions of same instrument and direction, then Dynamic Leverage will take effect.

Please also note that it does not matter how a position has come to exceed the volume limits. Even if you open 101 Lots at once or 10 orders of 10 lots and 1 order of 1 lot, the calculated margin will be the same.

The same principles apply for Metals and Energies, but with different USD volume limits and allowed leverages.

Closing Trades

When an account has open positions which are affected by Dynamic Leverage (i.e. the volume exceeds the USD volume limits) and you close some of those positions, then margin recalculation will start from the position with the lowest volume.

For example, let’s assume that you currently have 3 open positions on the same instrument and direction (e.g. Buy USDCAD):

Position #1 100 lots, opened first,
Position #2 3 lots, opened second,
Position #3 1 lot, opened last.

If you close position #3, then margin is recalculated for the 3-lot position first using leverage 1:500. Then the next largest position is recalculated. In this case it’s position #1. The first recalculated position was 3 lots Buy USDCAD, this means 300,000 USD Volume is already in place, with 9,700,000 USD Volume remaining for 1:500 leverage. The next position to be recalculated is 100 Lots Buy USDCAD, i.e. 10,000,000 USD Volume. The Dynamic Leverage then, calculates margin for 9,700,000 USD Volume (i.e. 97 Lots Buy USDCAD) using 1:500 leverage, and the remaining 300,000 is calculated using the next allowed leverage of 1:200.

Margin recalculation is not performed in order of chronology but rather the size of the positions, smaller positions are always calculated first.

The same principles apply for Metals and Energies, but with different USD volume limits and allowed leverages.