Leveraged Transaction - forex

Leveraged Transaction

Thanks to intermediary activities of intermediary institutions, it was possible for those who have small and medium volume investments to participate in the Forex market. In the FX market, which is entered into with an investment of 2-3 thousand dollars from many parts of the world, a few times the volume of this amount can be made through intermediary institutions.

For example: the leverage ratio of 1: 10 applied to the investment amount of $ 15,000 allows you to trade up to $ 150,000. In other words, the customer can perform FX operation with only 10% of the total transaction volume. FX transactions carried out by adding leverage within the scope of intermediation activities of intermediary institutions are called işlem leveraged trading Aracı. Leveraged operation; it aims to meet the possibility of any risk that may arise in transactions carried out by intermediary institutions and in accordance with the orders given by the customer for FX transaction. This system allows the processing of a high volume of 5, sometimes 10 times as much as the main investment amount which is kept as collateral against possible risks. The customer gains the right to trade over the amount in the account with the collateral deposited by the lever. After signing a contract with the intermediary institution, the client can operate using leverage.

Against the damages that may arise from the transactions made by the customer, the intermediary institution allocates some money from the client account as collateral. The amount of money allocated as collateral depends on the leverage ratio offered to the customer and the volume of transactions made.

For example: If the customer is considering a FX transaction of $ 500,000, using a leverage of 1:10, the FX account must only allocate 500,000 / 10 = $ 50,000 as a transaction security. If the customer uses 1: 5 leverage, then he must allocate 500,000 / 5 = 100,000 dollars as a guarantee of transaction in the FX account.

Leveraged Transaction

Leveraged Transaction

If the customer is damaged as a result of the foreign exchange trading, the total loss is deducted from the amount that the customer allocates as collateral. Conversely, if the transaction is profit, the total profit is transferred to the customer's account. One of the important requirements of the leveraged trading system is to close the damaging positions in time. It is rarely seen in the FX market that any currency lost more than 2% of its price against other currencies. Therefore, if the transactions are done by analyzing, it is not practically possible to lose all of the investment amount. If the loss of the transactions exceeds the amount of the account of the customer, the intermediary institution may close the position even without any additional warning to the customer. Lar The leveraged trading system in the FX market provides attractive conditions for both large investors and employees with a small amount of investment. Investment opportunities in other financial markets are not so easy.

For example: Although US Treasury Bonds are a very safe and stable (annual average of 3%) investment vehicle, there is a very high lower limit to invest in this market and long-term planning of the investment is required. Investments in companies' shares The profit rate of these companies 'annual balance sheets and other investors' stocks show these stocks the other is linked to demand. In the FX market, there are no restrictions. So everyone can participate in the market from all over the world, according to foreign currency price movements trading, and most importantly, in the calculation of only 1-3% volume of transaction volume separate.