Skip to content

Educational content, not investment advice.

Souq Dailyسوق ديليSouq Daily

Lesson 5 of 104:155 Sources

Leverage and margin — the double-edged sword

Recorded. Publishing soon

Presented by NourIn Arabic, with captions. Other languages are coming.

Educational content, not investment advice. Nour explains how markets work. She never tells you what to buy or sell.

Leverage lets a small deposit control a much larger position; margin is the collateral set aside — not a fee and not a part-payment.

  • Margin = lots × contract size ÷ leverage: 1 lot EUR/USD at 1:100 = €1,000.
  • At 100:1 a 1% move against you wipes out the initial margin (NFA).
  • When equity falls, positions can be closed automatically; in the EU retail CFDs are closed at 50% of required margin.
  • EU retail limits: 30:1 majors down to 2:1 crypto. ESMA found 74–89% of retail accounts typically lose money.
  • Watch effective leverage = total position value ÷ equity.

Quick check

Three questions. Pick an answer to see why.

0/3

  1. 1.Margin for 1 lot of EUR/USD (contract 100,000) at 1:100 leverage is:

  2. 2.What is margin?

  3. 3.What is the EU maximum leverage for retail clients on major currency pairs?

Sources

Every fact in this lesson is backed by the sources below.

  1. 1.CFTC GlossaryDefinitions of leverage and margin; margin is not a partial payment
  2. 2.MetaQuotes — MetaTrader 5 Help: Margin calculation (Retail Forex)Forex margin = lots × contract size ÷ leverage; 1 lot EURUSD at 1:100 = €1,000
  3. 3.NFA — Trading in the Retail Off-Exchange Foreign Currency Market: What Investors Need to KnowAt 100:1 leverage a 1% move against you loses the initial investment
  4. 4.ESMA (2018) — Restrictions on CFDs for retail investorsRetail CFD leverage limits 30:1 to 2:1; 50% margin close-out; negative balance protection; 74–89% of retail accounts lose money
  5. 5.CFTC Fraud Advisory: Foreign Currency (Forex) FraudMargin trading can lead to losses that exceed the amount deposited

Educational content, not investment advice. Risk warning: trading forex, CFDs, gold and crypto carries a high level of risk and may not be suitable for everyone. You can lose more than you put in. Souq Daily is an education platform. Nothing here is investment advice, a recommendation or an offer, and past performance does not predict future results.