Margin and Leverage (Quiz)

Leverage:

If you use leverage of 1:50 that would mean that you:

Assuming that you deposit 10,000, use 1:50 leverage, set aside 2,000, open a position of $100,000 and make a gain of $3500. What was the margin?

Let’s assume that you open a position of $240,000, by using a margin of $8,000. What’s the leverage used:

“Leverage acts as a double edged sword. It can magnify your profits if you trade in the correct direction, yet at the same time may eliminate your funds if the market turns against your position”.