Question: Is Forex leverage a “debt”? Am I borrowing money from online FX & CFD brokers?
Forex “Leverage” is an ability to trade larger volume and that ability is offered by each Forex broker.
In order to trade larger volume than your account balance, you are required to have the “minimum required margin”(minimum account balance) for the trade and that “margin” works as a collateral for your trades.
As long as you have the “minimum margin” in your trading account, you are able to hold the open position though, if you don’t have enough margin in your trading account you will not have the right to hold the position and the position will be closed automatically by your broker.
Using “Leverage” does not mean you are borrowing money from your broker and you are not responsible for paying for it later on.
But it is your responsibility to cover the losses caused by the trades made by you.
There are brokers that offer very high leverage like 1:1000 and 1:3000.
In the above page, you can find the list of online Forex and CFD brokers and compare their service conditions.
