FP Markets leverage is an essential trading tool, and this review will prepare you for FP Markets leveraged trading. We cannot over stress the importance for traders to understand leverage and its relationship to risk management, before trading any leveraged account.
What Is FP Markets’ Leverage?
FP Markets leverage can boost profits and magnify trading losses. Traders can borrow capital from FP Markets to control more substantial trade sizes, and most sources, including regulators, mislabel this as an increase in risk.
It is not leverage, but rather the absence of risk management or its improper implementation that increases risk. Traders should implement proactive risk management and understand that higher leverage decreases the price action level their trade can move against them before they will be forced to liquidate trading positions.
FP Markets Leverage by Asset Type
FP Markets leverage depends on the geographic location of traders and asset liquidity.
Here is a breakdown of FP Markets’ maximum leverage by asset type:
- Forex - 1:500
- Commodities - 1:500
- Indices - 1:100
- Bonds - 1:100
- Cryptocurrencies - 1:50
- Equity CFDs - 1:20
- ETFs - 1:20
Please note:
EEA-based retail traders and Australian-resident traders receive maximum FP Markets leverage of 1:30. Less liquid assets have higher margin requirements and, therefore, lower leverage.
How Do You Change Leverage in FP Markets?
Traders can adjust their maximum FP Markets leverage for greater control over risk management from their secure client area.
Here is how to change the FP Markets leverage:
- Log into your secure client portal.
- Navigate to “Change account leverage,” in the left menu.
- Select your trading account number from the first drop-down menu.
- Choose your desired maximum FP Markets leverage from the second drop-down menu.
- Click “Submit.”
Here are the FP Markets leverage options for international traders:
1:1 | 1:5 | 1:10 | 1:25 | 1:50 |
|---|---|---|---|---|
1:100 | 1:200 | 1:300 | 1:400 | 1:500 |
Regulation and CFD leverage limits at FP Markets
The FP Markets maximum leverage depends on the geographic location of traders, which determines the regulatory environment.
Here are the regulated FP Markets subsidiaries and their CFD leverage limits:
Country | Regulator | Leverage Maximum |
|---|---|---|
Australia | ASIC | 1:30 |
Cyprus (for EEA) | CySEC | 1:30 |
South Africa | FSCA | 1:500 |
Seychelles | FSA | 1:500 |
St.Vincent and the Grenadines | Unregulated but registered | 1:500 |
Can You Set Leverage Manually at FP Markets?
Traders can adjust their FP Markets leverage from ten preset levels via the secure client area, but they cannot manually enter desired leverage levels.
Please note:
- All assets have different maximum leverage settings, with Forex being the most flexible.
- Traders cannot increase the maximum leverage above the asset restrictions.
For example, equity CFDs have a 1:20 ceiling, and traders cannot increase the leverage beyond that level.
FP Markets Leverage - Pros & Cons
Before using FP Markets leverage, traders should evaluate the pros and cons to use it appropriately and avoid its negatives.
The Pros of FP Markets Leverage
- Negative balance protection ensures traders cannot lose more than their deposit.
- It allows smaller portfolios to achieve diversification.
- Automatic margin calls and stop-out levels mitigate risk.
- Traders gain increased capital to manage portfolios.
- It is an essential Forex trading tool.
- Traders benefit from greater profit potential.
- It acts as an interest-free loan if traders close the position intra-day (before 17:00 EST, at which point swap rates apply).
The Cons of FP Markets Leverage
- There is a lack of education concerning leverage and risk management.
- There is a false perception of leverage.
- Leverage can magnify losses.
- Improper use of leverage can be dangerous.
Bottom Line
FP Markets leverage is an essential trading tool, but traders should learn and understand the relationship between risk management and FP Markets leverage. It allows traders to turn smaller deposits into sizeable trading profits while managing the downside, but, equally, FP Markets leverage can magnify trading losses.
For additional up-to-date information on FP Markets, read our full broker review. FP Markets maintains a competitive trading environment with low, commission-based trading fees, upgraded trading platforms, cutting-edge trading tools, a well-balanced asset selection, and quality research and education for beginners. It also supports algorithmic and copy trading in a well-trusted trading environment. Therefore, FP Markets ranks among the leading brokers in the retail CFD trading industry. FP Markets operates various entities in different regulatory environments, which can impact leverage. Therefore, FP Markets offers EEA and Australian resident traders a more restrictive maximum Forex leverage of 1:30. Residents of many other countries get the industry standard 1:500. Negative balance protection exists for all traders with FP Markets, ensuring they cannot lose more capital than they deposit. The margin rate for FP Markets depends on the geographic location of traders, the asset, and its liquidity. It can be as low as 0.002% and as high as 50%.FAQs
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