# What is 1:500 Indices Trading Leverage for \$100 Mean?

Indices Trading Leverage in indices trading is the ratio of a indices trader's money to that of the borrowed capital that has been borrowed from the stock indexes trading broker.

for example 1:500 indices trading leverage means that for every 1 dollar a indices trader has in their indices trading account they have borrowed 500 from their stock indexes trading broker. Therefore if a indices trader has \$100 in their indices trading account they will have borrowed using 1:500 stock indexes trading leverage and therefore after stock indices leverage of 1:500 they will have \$100*1:500 stock indexes trading leverage and this will be equal to \$50000 dollars indices trading capital.

Indices Trading Leverage is the use of borrowed funds in indices trading so as to trade much larger volumes in order to increase the profit potential of trades.

1:500 indices trading leverage basically means that as a indices trader you get \$500 for every \$1 in your stock indexes trading account.

In Indices, a small deposit can control a much larger transaction this is called Indices Trading Leverage, which gives the indices traders the ability to make more profits on opened indices trades, and at the same time keep risk capital to a minimum.

A Indices trader will transact on borrowed capital, having \$100 dollars one can borrow the rest using a stock indices leverage option such as 1:500 - meaning that one borrows \$500 dollars for every 1 dollar they have in their stock indexes trading account, therefore in total they will control a total of \$50000 dollars without having to deposit all of it - this is how indices trading leverage works in stock indexes trading.

Indices Trading Leverage is expressed in the form of a ratio, for Example 1:500, means the indices broker with give a indices trader \$500 Dollars for every 1 dollar that the indices trader has.

Indices Trading Margin is the amount of money required by your indices broker so as to allow you to continue trading with the indices trading leveraged amount. Indices Trading Margin is the amount you deposit so as to open an account with. If you deposit \$100 then that is your indices trading margin.

With indices trading leverage it is possible for retail investors to trade the stock indexes trading market. Indices Trading Leverage of 1:500 means that for every dollar you deposit, the stock indexes broker will give you 500 dollars. This also means that in converse the indices broker requires you to maintain a margin of \$1 Dollar for every \$500 Dollars that they give you so as to let you continue controlling the borrowed amount of capital that they have given you for trading.

If you deposit \$100, and the indices broker gives you stock indices leverage of 1:500 then it means you now have \$100*(1:500) = \$50000 Dollars that you can trade with.

The more stock indices leverage you use the greater the profit or loss

The less stock indices leverage you use the lesser the profit or loss

It is therefore better to use less indices trading leverage so as to minimize the risks involved. The higher the stock indices leverage used the higher the risk. This is one of the indices trading leverage rules not to trade with more than 5:1 stock indexes trading leverage.

In indices trading leverage rules: It is always advisable to stay below 10:1 which is still high, most professional money managers use 2:1 in their indices trading account.

Indices Trading Leverage and Margin Explained