Sensible usage of leverage

Most commodity brokers offer leverage in commodity trading. Leveraging, margin trading or simply borrowing to invest, is a strategy that the wealthy have used to make themselves richer since capitalism began. Learn what it is below and how to take advantage of leverage in trading.

What is leverage in commodity trading?

If you invest £1000, you can usually leverage your investment 100-200 times the invested amount. So basically, you can trade for £100 000 or even £200 000 with the money you invested.

Why use leverage?

Leverage can help you get an advantage and power to act effectively. But it’s important to have a good trading strategy in place before using leverage. Otherwise you risk losing it all very quick. However, with a smart trading strategy and leverage used to a maximum of 2:1 you can efficiently get a better return on your commodity investment.