No, no, and NO!
If you can buy a $100 000 house with only $10 000 down payment, how much leverage is your friendly banker giving you?
Can you choose what leverage to use before each trade?
- Thread starter nwoptions
- Start date
No, no, and NO!
If you can buy a $100 000 house with only $10 000 down payment, how much leverage is your friendly banker giving you?
I will not answer any further posts from you.
You can’t wake a person who is pretending to be asleep
I knew you were going to say something like that, because you just realized that answering this simple question would automatically invalidate your "logic"
I will answer it for you then.
If you can buy a $100 000 house with $10 000 down your leverage is 10 to 1, period, even if you have 1 TRILLION dollars in your bank.
Leverage is not total capital divided by capital allocated to a trade (or transaction), that's total stupidity.
Leverage is margin money (down payment in this example) divided by the full value of the asset you are buying with that margin money, end of story..
Leverage is fixed by your broker and you cannot change it, you can only change the % of capital you want to place on each trade. And again, that % is not leverage.
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I am quoting myself because I want to add something to that comment.
Technically it IS possible to change the leverage in most cases, you just need to call your broker and tell him something like this:
"Hi Joe, the 100:1 leverage you are offering me does not suit me, I only want a 10 to 1 leverage".
If he approves your request now you will have to pay 10 times more margin money to buy the same amount of stuff than before.
You cannot adjust your leverage per trade,
when you sign up with your broker you get to chose it, basically for your entire account.
however, per trade you can vary the risk but that has nothing to do with leverage.
when you sign up with your broker you get to chose it, basically for your entire account.
however, per trade you can vary the risk but that has nothing to do with leverage.
This entirely depends on your broker. Some brokers need all the open positions to be closed before letting you change the leverage, while some brokers only offer you to set a predetermined leverage , some require you to fill a form and others will not let you change the leverage at all.