How to manage leverage?

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  • 01/27/2025 at 9:42 PM #243138 quote
    uktradingguy
    Participant
    New

    I am automatic trading equities and learning the platform.  Have watched videos and done a lot of reading but one question still remains. When I make profit/loss on a trade it is usually a few pounds – sometimes less.  Is there a way to increase leverage to enable my profits (and losses) to be much larger – 10x or 100x what they are now?

    In simple terms, can I adjust leverage when launching trades using auto trading systems?

    01/28/2025 at 5:40 AM #243141 quote
    JS
    Participant
    Senior

    Leverage is determined by the broker and is regulated under strict ESMA rules in Europe. For CFDs, the maximum leverage is typically set at 1:20. This means that with an initial deposit (margin) of €1,000, you can trade up to 20 times that amount, or €20,000.

    Your exposure in this case is 20 times larger than your initial investment. While this increases the potential for higher profits, it also significantly raises the risk. Even small market movements can lead to substantial gains or losses.

    You can increase your exposure by purchasing more contracts and utilizing the maximum leverage. However, it is crucial to always assess your maximum exposure from a risk perspective (excessive use of leverage can result in significant losses, potentially wiping out your entire margin, resulting in a “margin call”).

    Iván González thanked this post
    01/28/2025 at 10:46 AM #243154 quote
    GraHal
    Participant
    Master
    uktradingguy wrote:

    I am automatic trading equities and learning the platform

    I am intrigued … how many shares of companyX do you buy at a time?

    Whenever I have considered trading equities (via IG on PRT) the ‘IG spread’ seems prohibitive … esp. when qty is scaled up to make meaningful money?  Maybe I am issing something … surely buying equities through a normal broker at normal commission rates results in less fees paid to the broker?  A worked example would be useful?

    Most of us on here trade indices, e.g. the US100 on NASDAQ where the spread is 1 during market hours and if you buy 1 Contract and the index moves 1 point, you gain (or lose) £1.

    US100 can go up or down 100’s of points in an hour, so the opportunity for big gains (and losses!) is there to be had for just 1 Contract.  Is this an answer to your question … “Is there a way to increase leverage to enable my profits (and losses) to be much larger – 10x or 100x what they are now?” ?   

    01/28/2025 at 3:06 PM #243158 quote
    JS
    Participant
    Senior

    My text was related to an IG CFD (margin) account, but of course, you are on a spread betting account…

    I’m not sure how leverage is handled on a spread betting account…

    01/28/2025 at 4:53 PM #243160 quote
    GraHal
    Participant
    Master
    Leverage on SB Account is exact same as JS quotes (3 posts up) for CFD Accounts. My comments (2 posts up) are in response to a suspicion that the OP used the wrong term – leverage?
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How to manage leverage?


ProOrder: Automated Strategies & Backtesting

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uktradingguy @uktradingguy Participant
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This topic contains 4 replies,
has 3 voices, and was last updated by GraHal
1 year ago.

Topic Details
Forum: ProOrder: Automated Strategies & Backtesting
Language: English
Started: 01/27/2025
Status: Active
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