You will still be paying 2 pips. I used the same amount of leverage on Fxview and IB for trading GBP/CAD and the spreads remained the same. 0.0 pips for Fxview and 0.1 pips for IB. So no, the leverage has nothing to with spreads or commissions that the broker offers.
Does leverage magnify the commission I must pay my broker?
- Thread starter nwoptions
- Start date
Exactly true, what is spread the difference between the bid and ask price and the prices come from the LP's(for ECN brokers) and leverage can not levy any impact on the prices, both live on the different sides of a town hahaha.
Even for professional accounts with fxview where the leverage is 100:1 ?
There is no such business model from any broker as far as I know that charges based on what ratio of margin is used. They may charge in a ladder like borrow 1 million and get 0.95% and borrow $40,000 and get 1.85%.
No, the high amount of leverage does not alter the commission for the broker. Brokers generally charge commission on the basis of the number of lots with which you have entered into a position.
Margin or leverage seems like something huge to some clients. A client feels like they are provided a huge loan. It not so. This is simply a computer program that allows you to gamble huge with your *own money with zero risk to provider. Knowing that one will not think too much of leverage and fees etc...it's a simple process where broker will take all your money if you loose big and they will not loose anything. Read the last sentence again.
The amount you pay depends on the position size, not leverage. The leverage just increases your ability to make trades which position size exceeds your own capital. If you trade 1 lot you pay spread for 1 lot, if 2 lots - for 2 lots.
