There is leverage in silver trading. Leverage gives investors a small and big opportunity. So how to calculate silver leverage? How do investors use leverage to make profits? What should we pay attention to when using leverage?
"How to calculate silver leverage
The reason for silver trading is because of the margin system. To put it simply: you need to spend 10,000 yuan to buy 3 grams of silver, but according to the margin system, you only need to use 3,000 yuan, or even only 1,000 yuan to buy so much silver , But not physical silver. But once the price of silver has fallen, you have to deduct the margin from your purchase of silver. If it falls too much, it will be forced to close.
How to calculate silver leverage? Generally the value of silver leverage is the reciprocal of the margin ratio. With different leverage, such as 10 times leverage, you can engage in transactions with 10 times the amount of your funds.
Taking ICBC's silver td as an example, the current ICBC silver td's required margin ratio is 25%, and the forced margin ratio is 15%. What do you mean? This leverage is 4 times, that is, your 1 dollar can be used as 4 dollars to buy silver. The silver futures have a greater leverage of 4%, which means that the leverage is 25 times, and you can use 1 yuan as 25 yuan.
The intuitive benefit is that investors can buy larger investment products with smaller amounts. The disadvantage is that because of leverage, you lose more. For example: if you spend 1,000 yuan to buy 100 shares, the stock drops 1 yuan, and you lose 100 yuan. But if you use 10 times the leverage and spend 1,000 yuan to buy 1,000 shares, but if the stock falls by 1 yuan, all the 1,000 yuan you invested will disappear, and you will be forced out and the stock will be directly thrown out. This transaction will ended.
The largest silver leverage is spot silver, with a maximum leverage of 400 times, which is terrible. So overall, according to leverage, the risk of spot silver is higher than silver futures, and the risk of silver futures is higher than silver td.
For investors, once they use high leverage to make a profit, it may be doubled, or even more than ten times. But once you make a mistake, it's easy to lose all your funds. Therefore, investors need to look at leverage rationally. We must pay attention to risk control in the process of using leverage. Take silver td as an example. If the price of silver has fallen to a certain level and it has reached the level of loss that you can bear, you can close the position directly. The immediate stop loss is helpful to prevent high risks brought by high leverage.
Investors must know how to calculate silver leverage when investing in silver. Leverage is both a risk and an opportunity, so investors are advised to choose the product that corresponds to the leverage according to their risk appetite. The spot silver leverage can be chosen by themselves.