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