How to understand: leverage is the reciprocal of the margin ratio. After paying the deposit, the goods in the property right are completely yours. Then you must accept the fluctuation of the market price of the whole shipment. For example, if you need to pay a deposit of 10%, then the leverage is10; If you need to pay a deposit of 1%, then the leverage ratio is 100. Take buying more orders as an example. If the price goes up, you have the profit from the price increase of the whole batch of goods; If the price falls, you will suffer the loss of the whole shipment. If the loss exceeds the amount of the deposit you paid before, and you don't pay the deposit, the trading market will forcibly sell your goods, which is called short position. The lower the margin ratio, the higher the leverage. The same money can buy more goods, and the impact of market price fluctuations will naturally be greater and the risks will be higher.
Of course, margin trading is also established to a certain extent because the price fluctuation of the traded goods themselves is not very great. As far as foreign exchange transactions are concerned, the exchange rate is determined according to the economic development level of each country and is strictly controlled by governments of various countries. Except in extraordinary times, exchange rates usually fluctuate very little. If the transaction itself fluctuates greatly, such as stocks, there is no need for margin trading at all. At present, most financial markets are virtual transactions, of course, which do not involve the delivery of goods at all, but rather speculative price changes themselves. But forex futures trading's lever can be understood in this way.
How to invest in the bond market in 2023? Foreign pu