# How is Indices Trading Leverage Calculated?

stock indices leverage is calculated based on a ratio. The ratio can be 100:1 or 50:1 or 10:1.

For 100:1 stock indices leverage ratio it means
1:100 stock indices leverage option means a indices trader can borrow \$100 dollars from their indices broker for every \$1 dollar in their stock indexes trading account, therefore a indices trader with a deposit of \$1,000 can borrow up to \$100,000 from their indices broker - (\$1,000*1:100 which is equal to \$100,000). A indices trader can then use this borrowed capital to open stock indexes trades with.

For 50:1 stock indices leverage ratio it means
1:50 stock indices leverage option means a indices trader can borrow \$50 dollars from their indices broker for every \$1 dollar in their stock indexes trading account, therefore a indices trader with a deposit of \$1,000 can borrow up to \$50,000 from their indices broker - (\$1,000*1:50 which is equal to \$50,000). A indices trader can then use this borrowed capital to open stock indexes trades with.

For 10:1 stock indices leverage ratio it means
1:10 stock indices leverage option means a indices trader can borrow \$10 dollars from their indices broker for every \$1 dollar in their stock indexes trading account, therefore a indices trader with a deposit of \$1,000 can borrow up to \$10,000 from their indices broker - (\$1,000*1:10 which is equal to \$10,000). A indices trader can then use this borrowed capital to open stock indexes trades with.

Indices Trading Leverage and Margin Explained     