What is your leverage on money

How to calculate leverage

You calculate the leverage of a CFD,
by dividing the number 100 by the margin rate ((100 / margin rate) = leverage).

The leverage effect is calculated from the required security deposit. The following rule of thumb applies:

Margin rate (%)lever
333,3
520
1010
205
402,5
502
1001

High leverage is undoubtedly attractive. When trading on margin, however, keep in mind that the leverage always works in both directions, i.e. not only in the direction of profits, but vice versa also in the direction of losses.

The higher the leverage, the greater the effect of price changes.

example

You invest 1,000 euros each in shares and share CFDs. Compare the impact on your account if the base value changes by 1%. For the margin of 20% required for share CFDs, the remaining 80% of the position is financed by comdirect's trading partner. This creates a leverage effect of 5. This means for you: With a leverage of 5, a fluctuation of 20% in the base value is sufficient to double the capital employed (margin) or to lose your invested capital.

share
  1% change in course  -1% change in course
+10Profit / loss (EUR)-10
1.010Total capital (EUR)990
Stock CFD
1% change in course -1% change in course

5.050

Leverage Capital (EUR)

4.950

+50

Profit / loss (EUR)

-50

1.050

Total capital (EUR)

950