Leverage mechanism | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

High leverage vs Low leverage 74 replies

High Leverage vs Low Leverage 21 replies

High Leverage vs Low Leverage 20 replies

Pretty interesting BID/ASK MECHANISM during news-Another trick(dirty?) to take money? 0 replies

Inquiry of 400:1 leverage method 11 replies

Leverage mechanism

  • #1
  • First Post: Aug 28, 2006 5:45pm Aug 28, 2006 5:45pm
Hi, I a new to FOREX.
I understand that most of the Forex brokers give 100:1 leverage.
My question:-
From where the broker will get the trade 100 leverage ?
- The broker hedges from other clients' accounts ?
- Or the broker hedges from external finicial instute?
- Or the broker make a short-term loan from whomever?
I am really want to undersatnd what is mechanism, the broker uses to get that leverage for all the clients?
Thanks
  • #2
  • Aug 28, 2006 7:25pm Aug 28, 2006 7:25pm
Quoting Houd
Hi, I a new to FOREX.
I understand that most of the Forex brokers give 100:1 leverage.
My question:-
From where the broker will get the trade 100 leverage ?
- The broker hedges from other clients' accounts ?
- Or the broker hedges from external finicial instute?
- Or the broker make a short-term loan from whomever?
I am really want to undersatnd what is mechanism, the broker uses to get that leverage for all the clients?
Thanks
you actually pay interest on it, its a loan. at the end of the day if you havent closed your positions you get a charged (or credited) a swap rate.

here is an example.
http://www.interbankfx.com/swap_rates.php

although you might get paid or charged the broker always skims a bit off , notice the charge and pay are not the same?
  • #3
  • Last Post: Aug 28, 2006 8:46pm Aug 28, 2006 8:46pm
Quoting witchazel
you actually pay interest on it, its a loan. at the end of the day if you havent closed your positions you get a charged (or credited) a swap rate.
Thanks, for this info.
So, if i did close my positions at the end of the day, there is no swap rate?
0 traders viewing now