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XM caters to its 15M+ global traders from six entities, and during my XM review I analyzed the XM maximum leverage in each jurisdiction. Learn how the regulatory restrictions for each entity impact your trading and understand the pros and cons of the differing XM leverage conditions. I want to stress the importance of risk and lot size management in leveraged trading, as these are the factors that determine your risk exposure, not the available leverage ratio.
Regulation and CFD Leverage Limits at XM
During my XM review, I found that the maximum XM leverage depends on the specific entity, asset, and liquidity. The maximum XM leverage listed in the XM account types only applies to Forex.
Here are the various XM regulatory bodies and the maximum Forex leverage they allow:
1. Regulator: FSC (Financial Services Commission, Belize)
- Compensation Scheme: No
- Maximum Forex Leverage: 1:1000
2. Regulator: FSC (Financial Services Commission, Mauritius)
- Compensation Scheme: No
- Maximum Forex Leverage: 1:1000
3. Regulator: CySEC (Cyprus Securities and Exchange Commission)
- Compensation Scheme: Yes
- Maximum Forex Leverage: 1:30
4. Regulator: FCA (Financial Conduct Authority, UK)
- Compensation Scheme: Yes
- Maximum Forex Leverage: 1:30
5. Regulator: ASIC (Australian Securities and Investment Commission)
- Compensation Scheme: Yes
- Maximum Forex Leverage: 1:30
6. Regulator: DFSA (Dubai Financial Services Authority)
- Compensation Scheme: No
- Maximum Forex Leverage: 1:30
All retail traders receive the following:
- Segregated client deposits from corporate funds
- Negative balance protection
- Forced liquidation below 20% margin level
How Leverage Works in CFD Trading
XM leverage offers traders a capital injection by decreasing the margin requirement to open and hold positions. For example, 1:1000 leverage means that for each $1, traders can control a $1,000 position. It allows traders to achieve greater diversification with smaller portfolios or increase their earnings potential by borrowing capital from XM. Please note that leverage also magnifies downside moves and requires traders to adjust their risk management accordingly. XM charges swap rates on leveraged overnight positions, increasing final XM fees per trade.
XM Leverage by Asset Type
The XM entity and asset type determine the XM leverage, and not all assets within an asset class qualify for maximum leverage. Traders may explore XM leverage in the XM demo account while the trading platform lists the maximum leverage under contract specifications.
Asset | Maximum Leverage FSC/FSC | Maximum Leverage CySEC/ASIC/DFSA | Maximum Leverage FCA |
Forex Majors | 1:1000 | 1:30 | 1:30 |
Forex Minors | 1:400 | 1:20 | 1:20 |
Cryptocurrencies | 1:500 | 1:2 | N/A |
Majors, indices & gold | 1:500 | 1:20 | 1:20 |
Minor indices | 1:250 | 1:10 | 1:10 |
Non-gold commodities | 1:400 | 1:10 | 1:10 |
Equities | 1:20 | 1:5 | 1:5 |
Please note:
- Select jurisdictions, including the CySEC, DFSA, and FCA, offer professional account upgrades with a maximum Forex leverage of 1:500 for qualifying traders
- Muslim traders using the XM Islamic account also qualify for XM leverage
Can You Set Leverage Manually at XM?
XM allows traders to set their leverage manually, but it cannot exceed the maximum XM leverage determined by the asset type and regulatory restrictions.
How Do You Change Leverage at XM?
Traders can change the XM leverage from the secure MyXM area.
Here is how to change your XM leverage:
- Navigate to “Overview of My Accounts” towards the bottom of the MyXM area.
- Choose the account for which you wish to modify the leverage.
- Click “Change Leverage,” and choose the desired leverage from 16 options, ranging from 1:1 to 1:1000.
- Confirm your selection by clicking “Request.”
XM Leverage – Pros and Cons
Traders should consider the pros and cons of XM leverage, as they will impact margin requirements and influence the XM withdrawal.
The Pros of XM Leverage
- Negative balance protection
- 16 predefined leverage settings
- Automatic stop-out levels at 20% margin level
- Low swap rates on leveraged overnight positions
The Cons of XM Leverage
- The XM entity determines XM leverage
Bottom Line
The XM entity and asset determine the maximum XM leverage, ranging between 1:1 and 1:1000, with 16 leverage settings. Negative balance protection ensures traders cannot lose more than their deposit, and XM automatically closes positions once the account margin level drops to 20%. The margin is the capital requirement to open a position and depends on XM leverage. Margin has an inverse relationship to leverage. Therefore, the higher the leverage, the less margin traders pay. For example, a Forex trader opening a position with 1:1000 leverage has a 0.10% margin requirement. Therefore, the trader only pays 0.10% of the trade size from their capital and borrows the remaining funds from XM. The maximum lot size at XM is 100 lots, which equals 10,000,000 currency units. The XM leverage depends on the operating entity and asset. Traders get XM leverage ranging from 1:1 to 1:1000. Negative balance protection ensures traders cannot lose more than they deposit.FAQs
What is the margin on XM?
What is the maximum lot size in XM?
How much leverage does XM give?
Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.