Ekaterina NutriakovaDrive trader engagement with scalable gearing solution
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Build long-term relationships by offering personalized borrowing ratio solution that adapts to person’s needs
What is Dynamic Leverage?
Dynamic leverage is a plugin for trading platform that allows automatic changing of an account’s trading capacity in accordance with its:
- volume of open positions (lots)
- exposure (volume of open positions in the currency of trading account)
- equity
For example, when trading gold (XAUUSD), the first tier might offer 2000:1 for trades of 0-1 lot, and the second tier provides 1000:1 for trades of 1-5 lots, and so on.
So, if a trader buys 5 lots of XAUUSD, the first lot has 2000:1, and the remaining 4 lots have 1000:1. The overall leverage for this trade becomes 1200:1, which is an average of the leverage applied to all 5 lots.
Access Dynamic Leverage with Takeprofit Tech
Takeprofit Dynamic Leverage adjusts the leverage of trading accounts for both netting and hedging modes on trading platforms.
It also features an Excel-like schedule, allowing businesses to set specific levels for high-risk periods, such as during news events.
Get a trial of Dynamic Leverage
Please fill in the form and we will reply to you within on workday.
Use Case
Our client uses a leverage model that automatically adapts to the clients trading activity. As the volume per instrument of an account increases the maximum leverage offered decreases accordingly.
The client offers leverage up to 1:2000 on multiple asset classes and different account types.
Client’s setup
This example setup is done per trading instrument. As such, if a user is engaged in trading across multiple instruments, the leverage will be calculated separately for each symbol.
| Asset Class | Maximum Leverage |
|---|---|
| FX Majors | 1.4305555555556 |
| Gold | 1.4305555555556 |
| FX Minors | 0.38888888888889 |
| Crude Oil | 0.38888888888889 |
| Major Indices | 0.38888888888889 |
| BTC & ETH | 0.38888888888889 |
| FX Exotics | 0.18055555555556 |
| Silver | 0.18055555555556 |
| Minor Indices | 0.11111111111111 |
| Platinum & Palladium | 0.11111111111111 |
Margin requirements
FX Majors
| Lots | Margin | Maximum Leverage |
|---|---|---|
| 0-2 | 0.05% | 1.4305555555556 |
| 2-Oct | 0.10% | 0.73611111111111 |
| Oct-50 | 0.20% | 0.38888888888889 |
| 50-100 | 0.50% | 0.18055555555556 |
| 100-200 | 1% | 0.11111111111111 |
| 200+ | 4% | 1:25 |
Consider a USD account with leverage 1:2000, and 15 lots of EURUSD (Buy or Sell).
The margin required would be as below:
| Lots | Applicable Leverage | Applicable Margin Requirement | Margin Calculations | Margin Amount in Symbol Currency |
|---|---|---|---|---|
| 2 | 1.4305555555556 | 0.05% | 2 (Lots) * 100,000 / 2000 (leverage) | 100.00 EUR |
| 8 | 0.73611111111111 | 0.10% | 8 * 100,000 / 1000 | 800.00 EUR |
| 5 | 0.38888888888889 | 0.20% | 5 * 100,000 / 500 | 1,000.00 EUR |
| Total Required Margin in Symbol Currency | 1,900.00 EUR | |||
FX Minors
| Lots | Margin | Maximum Leverage |
|---|---|---|
| 0-10 | 0.20% | 0.38888888888889 |
| Oct-50 | 0.50% | 0.18055555555556 |
| 50-100 | 1% | 0.11111111111111 |
| 100-200 | 2% | 1:50 |
| 200+ | 4% | 1:25 |
Consider a USD account with leverage 1:2000, and 120 lots of EURJPY (Buy or Sell).
The margin required would be as below:
| Lots | Applicable Leverage | Applicable Margin Requirement | Margin Calculations | Margin Amount in Symbol Currency |
|---|---|---|---|---|
| 10 | 0.38888888888889 | 0.20% | 10 (Lots) * 100,000 / 500 (leverage) | 2,000.00 EUR |
| 40 | 0.18055555555556 | 0.50% | 40 * 100,000 / 200 | 20,000.00 EUR |
| 50 | 0.11111111111111 | 1% | 50 * 100,000 / 100 | 50,000.00 EUR |
| 20 | 1:50 | 2% | 20 * 100,000 / 50 | 40,000.00 EUR |
| Total Required Margin in Symbol Currency | 112,000.00 EUR | |||
FX Exotics
| Lots | Margin | Maximum Leverage |
|---|---|---|
| 0-20 | 0.50% | 0.18055555555556 |
| 20-50 | 1% | 0.11111111111111 |
| 50-100 | 2% | 1:50 |
| 100+ | 4% | 1:25 |
Consider a USD account with leverage 1:2000, and 55 lots of EURZAR (Buy or Sell).
The margin required would be as below:
| Lots | Applicable Leverage | Applicable Margin Requirement | Margin Calculations | Margin Amount in Symbol Currency |
|---|---|---|---|---|
| 20 | 0.18055555555556 | 0.50% | 20 (Lots) * 100,000 / 200 (leverage) | 10,000.00 EUR |
| 30 | 0.11111111111111 | 1% | 30 * 100,000 / 100 | 30,000.00 EUR |
| 5 | 1:50 | 2% | 5 * 100,000 / 50 | 10,000.00 EUR |
| Total Required Margin in Symbol Currency | 50,000.00 EUR | |||
Get a trial of the product
Please fill in the form and we will reply to you within on workday.
FAQ
Why is dynamic leverage good for market participants?
Higher leverage means less capital is required to enter a market, giving your client the opportunity to make significant profits from relatively small price movements.
But as a investor’s exposure raises on an instrument, the leverage reduces according to the leverage tiers. This helps protect against big loss.
Thus, the solution controls a customer’s risk exposure and allows to maximize his trading potential.
Which instruments is solution available on?
The solution is available on Forex, CFD, CFD-Leverage, CFD-Index.
What is the margin stop-out level?
The margin stop-out level is the point at which open contracts are automatically closed by the fx trading firm due to insufficient margin. This happens when the person’s margin level falls below a predefined threshold set by the firm.
Formula: margin level (%) = (equity / used margin) × 100
Companies typically set the stop-out level between 20% and 50%. If an organization sets a stop-out level at 50%, holdings will be liquidated when the margin level drops to 50%.
How does dynamic leverage impact order execution and slippage?
The plugin can affect order execution by influencing the required margin at the time of trade placement. If leverage decreases due to high volatility, your customers may need higher margin requirements, potentially leading to partial fills or rejected orders.
Can brokers apply different margin rules for professional and retail purchasers?
Yes, fx service provider can differentiate leverage rules based on their consumer classification. Retail investors may have regulatory leverage caps (e.g., 1:30 in Europe under ESMA), while professional ones can access higher tiers based on experience and capital. This segmentation can be managed via automated KYC and risk assessment systems.
