Risk
What is Leverage?
By the verify.trading team · Last reviewed · How we write
Key points
- Magnifies gains and losses equally.
- Retail caps in the UK and EU: 30:1 on major forex pairs.
- Lower leverage is a risk control, not a handicap.
Leverage explained
It magnifies both gains and losses because profit and loss are calculated on the full position size, not on your margin. High leverage is the fastest way to turn a small adverse move into a large loss.
Regulators cap it for retail clients. Under UK and EU retail rules the maximum on major forex pairs is 30:1, with lower limits on other instruments. Your broker's limit depends on the entity that holds your account and your client category.
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General education, not investment advice. Regulatory limits and prop firm rules change; check the official source. verify.trading provides records and analysis, not investment advice; trading involves significant risk of loss. Absence of a regulatory action is not an endorsement, and absence from a regulator's list is not proof of authorisation.