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January 13, 2021

What's the difference of Deriv's Margin trading and Multipliers?

Multipliers and Leverage. What are the differences and which is better?

What's-the-difference-of-Deriv's-Margin-trading-and-Multipliers What's-the-difference-of-Deriv's-Margin-trading-and-Multipliers

Deriv - What's now?

Note that the website Hercules.Finance does not promote or introduce the service of Binary Options.

Deriv does not provide the service to residents in USA, Canada, and Hong Kong, or to persons below 18.

What is margin (leverage) trading with Deriv?

deriv What is margin trading

With Deriv, you can trade various financial markets such as Forex, Precious Metals, and Stocks.

When you trade with Deriv, you will need to have a certain “margin” that is a deposit required to open a leveraged position.

With Deriv’s “Margin Trading” you can open a position larger than your capital investment.

If you choose the “Margin Trading” with Deriv, you can purchase larger units of an asset at a fraction of the cost.

With Deriv’s Leverage (margin trading), you can practically increase your market exposure even if you are trading with limited capital.

The result is a more substantial profit when you win a trade and of course, a more significant loss when you lose.

The relationship between margin and leverage

“Margin” and “Leverage” have different meanings although they are used interchangeably in the market.

The difference is who they are expressed.

While leverage is expressed in ratios such as 50:1, 100:1, and 400:1, the margin is expressed as a percentage of the amount required to open a position, such as 2%, 1%, and 0.25%.

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What are multipliers of Deriv?

For traders who want advanced options to increase the volume of trading, Deriv offers “multipliers” that combine the upside of leverage trading with the limited risk of options.

While the “Leverage” (margin trading) increases the volume and you will earn or lose a larger amount depending on the market’s movement, Deriv’s multipliers limit the risk to your stake.

With Deriv’s multipliers, you can multiply your potential profits when the market moves in your favour, and limit the loss only to your stake if the market moves against your prediction.

Comparing to the traditional “margin trading”, Deriv’s Multipliers can give you great advantages for trading.

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How does Deriv’s Multipliers work?

To understand more about how Deriv’s Multipliers work, here is an example of a trading using the Multipliers.

Let’s assume that you predict a price of a certain market to go up, so you trade with $100 of stake.

Without using the Multipliers, even if the market goes up 2% as you predicted, you will earn only 2% of the stake which is 2% * $100 = $2 profit.

Without a multiplier, if the market goes up by 2%, you'll gain 2% $100 = $2 profit.

If you have applied Deriv’s Multipliers of ×500, you would have gained 2% * $100 * 500 = $1,000 profit.

With a x500 multiplier, if the market goes up by 2%, you'll gain 2% $100 500 = $1,000 profit.

If you have used the “leverage” (margin trading) of 1:500 instead of the Multipliers, you would have risked 2% * $50,000 = $1,000 loss.

With an equivalent $100 margin trade, with 1 500 leverage, you risk 2 $50,000 = $1,000 loss.

But since you have chosen the Multipliers of ×500, you will lose only $100 as an automatic stop out kicks in if your loss reaches your stake amount.

With a x500 multiplier, if the market goes down 2%, you'll lose only $100. An automatic stop out kicks in if your loss reaches your stake amount.

With Deriv’s Multipliers, you can manage your funds efficiently and smartly.

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Margin trading and Multipliers. Which is better?

Now it does seem that the “Multipliers” is much better than the “Leverage” (margin trading) though, both trading options have different advantages for traders.

You may open an account with Deriv and choose the option as it suits your trading style.

You should choose the leverage (margin trading) because:

Deriv’s 1:500 High leverage and low spreads
You can take advantage of both high leverage and low spreads on Deriv MT5 (DMT5).
Invest in any markets you want
Trade on all popular markets plus Deriv’s proprietary synthetic indices that are available 24/7.
Go long and short as you want
Open long and short positions, depending on your preferred trading strategy.
Professional and friendly support
Get expert, friendly support from Deriv when you need it.
Instant access from anywhere and any time
Open an account with Deriv and start trading in minutes.

Start Margin Trading with Deriv

You should choose the multipliers because:

Better risk management
Customize your contracts to suit your style and risk appetite using innovative features like stop loss, take profit, and deal cancellation.
Increased market exposure
Get more market exposure while limiting risk to your stake amount.
Secure, responsive platform
Enjoy trading on secure, intuitive platforms built for new and expert traders.
Trade 24/7, 365 days a year
Offered on forex and synthetic indices, you can trade multipliers 24/7, all-year-round.
Crash/Boom indices
Predict and gain from exciting spikes and dips with Deriv’s Crash/Boom indices.

Try Deriv’s Multipliers

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