FXFrench.com
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hi.. i have a question about leverage.
can FXOpen explain how is your stand about leverage?
for example, i've opened a micro account with leverage 1:500 and deposited 100usd
so thats means i've credited with 50,000usd / have the buying power of 50,000usd right? (100usd from deposit + 49.9k from broker)
so here, i want a clarification about:
1) does really FXOpen lend 49.9k to me?
2) if not, where this 49.9k come from?
3) the cost of buying 0.1 lot micro account = 100usd right?
hope u can explain this to me.. thx!
Leverage only affects the margin cost of your trade. You don't actually get $50k in your account balance, you just get increase buying power on the market.
You can use the following formula to work out margin cost for 0.1 lots.
(pricex10,000)/leverage=$margin
So for 0.1 lots eur/usd at 1:500 on a standard account...
(1.5568x10,000)/500=$31.14
Micro accounts are in cents so the cost there would be 31c