Avatrade Leverage Trading: Everything You Need to Know

What is Avatrade Leverage?

Leverage trading or margin trading refers to the type of trading where funds are borrowed by an investor from a broker in order to add or open a position in an investment that is higher than the capital present in the account. In the context of Avatrade, it means that traders are allowed to use Avatrade leverage for forex, commodities, stocks, and bitcoin trading.

It is important to understand that any form of margin trading is risky, especially when the losses start mounting. In such cases, the brokers may go for the margin call to liquidate the holdings. To make sure that such a situation never arises, it is highly recommended for you to carefully handle the leverage and make sure that the position never moves against you.

Avatrade leverage for the clients

Regardless of whether you plan to margin trade now or in the future, you need to have a fair idea about the leverage offered by a broker. So, Avatrade maximum leverage is 400 to 1. But the ratio might be lower for the accounts held in the European Union. However, there are certain rules and guidelines to be kept in mind for Avatrade leverage. Read on to know more details about that.

Avatrade leverage by asset type

Avatrade leverage depends on the asset type and regulatory jurisdictions. As per the regulatory jurisdiction, a majority of retail traders get the maximum of 1:30 according to the restrictions and guidelines of The European Securities and Markets Authority. However, traders based in South Africa, the British Virgin Islands, and other professional clients can get the highest leverage of 1:400.

Here are more details on Avatrade leverage based on the asset type:

• Cryptocurrency: Traders get 1:20 leverage for nine cryptocurrencies, though this facility is not available in the UK or Canada. Avatrade Bitcoin leverage stands at 1:25 for non-EU traders and 1:2 for others. Some of the cryptocurrencies that are allowed include Bitcoin cash, Bitcoin, Ethereum, and Ripple.
• Forex: More than fifty currency pairs are available, which includes all minors, majors, and several exotics available on all days of the week. Traders on AvaTrade get to enjoy good competitive spreads that go down to 0.8 pips. They can leverage up to 1:400.
• Options: Avatrade even makes trading in options a possibility, regardless of the experience level of the traders. It opens up even more opportunities for traders on the platform.
• Commodities, ETFs, stocks, bonds, and indices: Avatrade traders get pretty high leverage and low spready in all these asset classes. For instance, it is 1:33 for CFD trading, 1:20 for stock index CFD, and 1:5 for stock CFD.

How Do You Change Leverage in Avatrade?

As the details of leverage in Avatrade are clear now, let’s move on to showing you how to change leverage on Avatrade. To start with, trading in leverage on the platform is not possible if you do not have enough funds in the client account. Sufficient funds are necessary for the Avatrade margin call. You need this to protect yourself from future losses and meet the margin requirements of the platform.

In order to change the leverage, open any trade and choose your leverage from the given margin options. Press confirm and that’s it. Avatrade does not allow you to change the default leverage levels of the products. It can be challenging for an inexperienced investor because they might want to set lower leverage ratios than the preset ones.

Conclusion

Leverage can earn you huge profits just as easily as it makes you run in major losses. Remember that it is a complicated financial tool and has to be viewed like that. It can be fantastic and devastating at the same time. So, make sure you have enough capital to recover from the losses before getting into leverage. As a beginner, it is best to either completely ignore it or limit your exposure to it, or try it on AvaTrade using a demo account. Keep it at 1:10 to mitigate the chance of running in losses.