Can I Trade Without Trading Leverage?
In indices, a trader can trade without trading leverage by choosing the 1:1 stock leverage option for their trading account. Stock leverage of 1:1 means that the trader has not borrowed any capital from their broker & the trader will only use the money they have deposited in their trading account for trading.
This option of not leverage is not very popular because leverage is what makes the trading market popular among online traders - because with trading leverage trading option: for example 1:100 stock leverage option means one can borrow $100 dollars from their broker for every one dollar in their trading account, therefore one with a deposit of $1,000 can borrow up to $100,000 from their broker - ($1,000*1:100 which is equivalent to $100,000). One can then use this borrowed capital to open stock trades with.
Also, if there was no trading leverage then the trading market would be inaccessible to many traders as they would require a lot of capital before they start online trading, but with trading leverage stock traders can deposit a small amount of capital & use trading leverage to borrow the rest of the capital required to open a trade from their trading broker.
The deposit a trader puts in their trading account is known as margin. This margin in stock account is the money that traders used when borrowing from their broker using leverage. If a trader has a margin of $1,000 in their trading account they will then use this $1,000 to obtain trading leverage from their trading broker and then open stock trades with the capital borrowed from their trading broker.
To Learn and Know More about Trading Leverage & Margin - How to Read the Topics Below:
Stock Leverage & Margin Explained
What's a Trade Plan? - Written Plan Example Template
Alternatives: Automated EA Trading or Copy and Paste Signals
