Broco Trader floating leverage
As from 20th of July, 2010 new method of leverage calculation for FOREX trading has been implemented
This new feature expand trading capabilities for clients with large deposits. Before this leverage was strictly connected with the size of the deposit. Even though the client used only small amount of the funds he had to enter the trades with lesser leverage. Floating leverage helps to eliminate this limitation.
From now on leverage is to be calculated respectively to the amount of opened lots for every instrument. In other words the more lots are opened to trade every specific currency pair, the lesser leverage will be available for every new opened lot. This leverage will be N tiles lesser then the default leverage. Default leverage is the one which is set in the trading account settings.
Settings are to be used as following:
|
|
|
|---|---|
| Up to which lot (inclusively) |
Leverage reduction rate |
| 3 | 1 |
| 5 | 1,5 |
| 8 | 2 |
| 10 | 3 |
| 13 | 4 |
| 15 | 5 |
| 20 | 6 |
| 25 | 7 |
| 30 | 8 |
| 35 | 9 |
| 40 | 10 |
| 45 | 11 |
| 50 | 12 |
| 100 | 20 |
| 1 000 | 100 |
|
|
|
Or to be more convenient to understand:
|
|
|
|---|---|
| From which lot | Leverage reduction rate |
| 3,01 | 1,5 |
| 5,01 | 2 |
| 8,01 | 3 |
| 10,01 | 4 |
| 13,01 | 5 |
| 15,01 | 6 |
| 20,01 | 7 |
| 25,01 | 8 |
| 30,01 | 9 |
| 35,01 | 10 |
| 40,01 | 11 |
| 45,01 | 12 |
| 50,01 | 20 |
| 100,01 | 100 |
| 1 000,01 | 100 |
|
|
|
Example
Trading account has set default leverage as high as 1:200. If there are up to 3 lots opened 1:200 leverage will be provided.
If the trading account already has 3 lots opened the following volume enlargement up to 5 lots will be carried out with 200/1,5=133,33 leverage. Therefore there will be 3 lots with 1:200 leverage and another 2 lots with 1:133,33 leverage opened.
At the same time please note:
- Locked positions will not be included in the calculation hence unlocked positions are calculated separately. For example if there are 6 SELL lots along with 4 BUY lots, only 2 lots will be opened with default leverage (1:200 in our example).
- Positions opened for every specific currency pair will be calculated only. For example the trading account has 2 EURUSD and another 3 USDJPY lots opened to buy which make 5 lots in total. All 5 lots will be opened with default leverage because they refer to different currency pairs.
- Standard FOREX and FOREX_FX (forex pairs with variable spread) lots will be summarized. 3 EURUSD and 3 EURUSD_FX lots will be calculated together as 6 lots. 3 out of 6 lots will be opened with 1:200 leverage (with fixed spread set as 1:200) while another 2 lots will be opened with 1:133.33 leverage and last remaining lot will be opened with 1:100 (200/2) leverage.
Specified LotsView indicator is offered to simplify margin requirements calculation for positions being opened. This indicator calculates and displays the size of the aggregated lot size which could have been reached in case default leverage is used for the trade in whole.
For example, there are 6 EURUSD buy lots opened. Leverage is set as high as 1:100. These 6 lots with floating leverage according to the indicator's calculation are equivalent to 8 lots with default leverage. Knowing this, you may estimate margin for opened position as following: 8*100.000*(current price)/100.
Please note that there could be a slight difference between the size of the margin calculated by the indicator and actual margin calculated by the terminal on the bases of the leverage reduction rate indicated in the table. It is caused by difference in calculation methods which generate certain measure of inaccuracy at every stage of calculation. This indicator is available in updated versions of Broco Trader. Besides you can download and install this indicator using its manual.
Please note that LotsView carries out calculations for opened positions only. For preliminary evaluation of the margin you can use separate LotsView application which is available for downloading.
To get additional information regarding floating leverage or in case of set leverage change please contact your personal broker.
