The percentage of the money you are allowed to “borrow” from your broker in order to open a position. Think of it as a “loan” from your broker. It helps traders to trade higher volumes with a smaller amount of money. The more you leverage your money, the higher the potential for profit, and the risk of loss from trades.
Vincent Nyagaka is a Professional Trader, Analyst & Author. He has been actively engaged in market analysis for the past 7 years. He has a monthly readership of 100,000+ traders and has taught over 1,000 students since 2014. Vincent is also an experienced instructor and public speaker. Check out Vincent’s Professional Trading Course here.