What is leveraged forex?

The products we offer for trading forex are leveraged, meaning that you only need to put up a fraction of the total value of your position. Your profit or loss, however, is based on the full position so it’s possible to gain or lose a sum much larger than your initial outlay. While trading this way require careful risk management, many traders use leveraged products to magnify their exposure in the market at a cost much lower than that of owning the underlying asset.

Create an account

The benefits of leveraged trading

Make efficient use of your capital with leveraged trading, and get exposure in the markets for only a small proportion of the notional price of your trades. 

Easy chart depicting the role played by leverage in trading | What is Leveraged Forex?
  • Take a position with a fraction of the capital needed for the equivalent cash trade
  • Leaves the remainder of your capital free for a range of positions
  • You can back markets to fall, as well as rise
  • It’s tax efficient – spread betting is tax free, CFDs are tax deductible1

Managing your risk

Leveraged forex trading can be risky. While you only need to put up a fraction of the capital compared to the actual size of the trade, your profits and losses are based on the trade’s notional value and can quickly exceed the size of your initial deposit. This makes it essential that you take steps to manage your risk.  

Keep track of your positions

Use our mobile apps to monitor your positions on the move and set alerts to trigger when the market meets certain price conditions.

Use stops and limits

Cap your losses and lock in profits by setting stops and limits. Put guaranteed stops on new positions to protect against slippage if the market ‘gaps’. You’ll pay a small premium for this extra protection, but only if it’s triggered.

Know your markets

Check our market data and news pages to stay on top of market events, and benefit from our real-time in-platform resources.

Ease yourself in

Trade with reduced minimum sizes for two weeks with our introduction programme.

Learn more about risk management.

Who trades leveraged forex?

If you already actively trade the financial markets, adding leveraged forex to your portfolio is an alternative way to take advantage of price movements, without having to buy the underlying asset. 

The risks involved mean that leveraged forex trading isn’t suitable for everyone, but it generally attracts:

  • Traders seeking tax-free profits1
  • Share, commodity and index traders looking to diversify their portfolios
  • People with an interest in currency markets and the factors that affect their volatility
  • Those looking to earn larger returns on their investment capital, through leverage

1If spread betting; tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.