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Old 11-10-2008, 01:34 PM   #7 (permalink)
pkevl
 
Join Date: Nov 2008
Posts: 5

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I'm almost there, but not quite...

If you have $10,000 in your account and you trade 1 lot of USD/JPY with a minimum margin of $50, I dont follow how this isnt 1:200 leverage. I see that the account and open exposure are equal ($10K), but the used margin (which you equated to a downpayment for house) is still $50. To my thinking, in this example we've put up $50 for a $10K contract. $10,000 over $50 is 200, right? Why isnt this 1:200 leverage?

Thanks for bearing with me.
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