Octa Leverage Reviewed - Updated [year]

Octa operates two primary entities, one for EU-resident traders with restrictive leverage settings and one for international traders with competitive trading conditions. The CySEC and FSCA-regulated entities operate under different rules and regulations, and we have evaluated the Octa leverage conditions as part of our comprehensive Octa review. Traders should consider the conclusion of our Octa leverage analysis to make the best decision for their portfolios.

What Is Octa’s Leverage Offer?

Octa leverage provides traders with a capital injection by decreasing the margin requirement to open and hold positions. So, traders can control a higher position by borrowing capital from Octa, for which Octa charges swap rates on leveraged overnight positions, increasing final Octa fees per trade.

For example, 1:500 leverage means that for each $1, traders can control a $500 position. Octa will issue a margin call once the account margin drops below 25% and close positions after the account decreases below 15% account margin. This helps Octa protect itself and its traders.

Regulation and CFD Leverage Limits at Octa

The maximum Octa leverage listed in the Octa account types applies to Forex traders, while other asset classes have less leverage based on liquidity.

Not all assets within an asset class qualify for maximum leverage, and the 1:1000 maximum Octa leverage applies to intraday positions. Octa reserves the right to decrease leverage for overnight positions, which increases the margin requirement. Therefore, readers must ensure they have sufficient capital.

Here are the regulation and leverage limits at Octa:

1. Regulator: FSCA (Financial Sector Conduct Authority)

• Complaints Authority: Office of the Ombudsman for Financial Services Providers
• Compensation Scheme: No
• Maximum Forex Leverage: 1:1000

2. Regulator: CySEC (Cyprus Securities and Exchange Commission)

• Complaints Authority: The Financial Ombudsman of the Republic of Cyprus
• Compensation Scheme: Investor Compensation Fund (ICF), up to €20,000 or 90% of assets per eligible investor
• Maximum Forex Leverage: 1:30

All retail traders receive the following:

• Segregated client deposits from corporate funds
• Negative balance protection
• Automatic margin call at 25% account equity
• Mandatory 15% margin closeout

Octa Leverage by Asset Type

The Octa leverage depends on the Octa entity and asset type. Not all assets within an asset class qualify for maximum leverage, and the trading platform lists the maximum leverage per asset under contract specification. Traders can explore leverage by asset with the Octa demo account.

Can You Set Leverage Manually at Octa?

Octa allows traders to set their maximum leverage manually, but the leverage cannot exceed the maximum Octa leverage and must comply with the preset leverage settings. Traders using the Octa Islamic account should confirm with their account manager about leverage settings.

How Do You Change Leverage at Octa?

Traders can change the Octa leverage from the secure client area by navigating to their “Primary Account” section.

Here is how to change your Octa leverage:

• Click the leverage ratio in the “Primary Account.”
• Set the preferred leverage from the available settings.
• Press the “Change” button.

Please note:

• Octa cautions traders to ensure they have no open positions or pending orders before changing the Octa leverage.

Octa Leverage – Pros & Cons

I recommend traders consider the pros and cons of Octa leverage, as it impacts margin requirements and influences the Octa withdrawal.

The pros of Octa leverage include the following:

• Flexible leverage settings
• Negative balance protection
• Automatic stop-out levels
• Low swap rates

The cons of Octa leverage include the following:

• The Octa entity determines Octa's leverage.

Bottom Line

The Octa entity and asset class determine the maximum Octa leverage. Octa offers negative balance protection and sends a margin call below 25% of account equity, followed by automatic liquidations below 15%. Traders should also master the leverage-risk management and lot size-risk management relationship.

FAQs

What is the maximum lot size at Octa?

The maximum lot size in Octa is 500 lots for MT5 and 50 for OctaTrader.

Is 1:30 good leverage?

1:30 is not a good leverage. It is ultra-conservative leverage, especially for Forex, and tier-1 regulators implemented it after 2017 under the misguided claim to decrease risk for retail traders. Leverage has zero impact on risk, as the lack of risk management defines risk. Since regulators have no control over education, they applied a forced leverage reduction.

How much leverage does Octa give?

Forex traders with the FSCA-regulated entity receive a maximum Octa leverage of 1:1000 compared to 1:30 at the CySEC-regulated entity. Other assets have a maximum leverage between 1:40 and 1:400 at the former and 1:10 to 1:25 at the latter. The FSCA-regulated entity offers unleveraged investments in 100+ companies for buy-and-hold and dividend investors.

By DailyForex.com Team

The DailyForex.com team is comprised of analysts and researchers from around the world who watch the market throughout the day to provide you with unique perspectives and helpful analysis that can help improve your Forex trading.