What's The Difference Between Maximum CFDs Leverage & Used Leverage?

You should note that there is a difference between maximum trading leverage ( cfd leverage given by your broker which is the highest leverage you can trade with if you choose to) and used trading leverage ( cfd leverage depending on the lots you've opened/open trade positions). One is broker's (Maximum) and other is trader's (Used). To explain this concept we shall use the cfd example above:

If your broker has given you 100:1 Maximum cfd leverage, but you only open trading lots of $100,000 then Used leverage is:

100,000 : $10,000 (your money)

10:1 Used Leverage

You have used 10:1 cfd leverage, but your max cfd leverage is still 100:1. This means that even if you are given 100:1 Maximum leverage or 200:1 Maximum cfd leverage, you do not have to use all of it. It's best to keep your used leverage to a maximum of 10:1 but you'll still choose 100:1 maximum leverage option for your trading account. The extra cfd leverage will give you what we call Free CFD Margin, As long as you've some Free margin on your trading account then your trades won't get closed by your trading broker because this margin requirement will remain above required level.

When it comes to cfd trading one of your cfd rules: cfds money management trading rules on your cfd plan should be to use below 5:1.

Leverage Example

The example shown below, the set trading leverage ratio is 100:1, the margin which is 1 percent is $2683.07, therefore the total amount controlled by the trader is: $268,307 - this is because with this leverage the trader has used little of his money & borrowed the rest of the money, with this set at 100:1, the trader is using 1 percent of their account capital, this 1% is equal to $2683.07, if 1% is equivalent to $2683.07 then 100% is $268,307

MT4 Platform - What's The Difference Between Maximum CFDs Leverage & Used Leverage?

In the above image example, the trader is using $2683.07, the total controlled amount is $268,307, but account equity is 16,116.55, therefore used leverage is ($268,307 divide by 16,116.55) = 16.64 : 1

16.64 : 1

In the cfd account above even though the max leverage set trading leverage is 100:1, Used leverage is 16.64 : 1