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π± Stock trading: what you need to know
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π Unlike direct trading on the stock market, CFDs are leveraged to maximize profit potential. We remind you that in this case, potential losses also increase. So β¦
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The parameters we need are specified in the specification of the trading asset. To open a position, a trader needs to pay only a part of the total transaction value. For CFD assets, the margin is traditionally indicated as a percentage. Look in the specification, for example, for
APPL shares - the primary margin is 20%, which means the leverage level is 1:5. Remember, the higher the leverage, the lower the margin level, but for stocks, leverage greater than 1:20 is extremely rare.
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For some brokers, the leverage may vary by session type and/or position size. For example, within a day on a regular session (initial margin) the leverage can be 1:20 (or 5%), and when carried over to the next day (maintenance margin) - already 1:10 (10%). Also, the leverage can be adjusted before weekends or holidays - carefully study the Margin Requirements, otherwise, in case of an unexpected (for you!) Change in the leverage, the collateral on your deposit may not be enough and your positions will be automatically closed at the current price.
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We recommend choosing a broker with fixed leverage conditions.
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Profits to y'all!