# What is The Difference Between Maximum Stock Trading Leverage and Used Stock Trading Leverage?

You should note that there is a difference between maximum stock trading leverage ( stock trading leverage given by your broker which is the highest stock leverage you can trade with if you choose to) and used stock trading leverage ( stock trading leverage depending on the lots you have opened/open positions). One is the broker's (Maximum) and the other is trader's (Used). To explain this concept we shall use the stocks trading example above:

If your stock broker has given you 100:1 Maximum stocks trading leverage, but you only open trading lots of 100,000 dollars then Used stock trading leverage is:

100,000 dollars : 10,000 dollars (your money)

The example explained below, the set stock leverage is 100:1, the margin which is 1% is \$2683.07, therefore the total amount controlled by the stock trader is: \$268,307 - this is because with this stock trading leverage the stock trader has used little of his money and borrowed the rest, with this set at 100:1, the stock trader is using 1 % of their capital, this 1% is \$2683.07, if 1% is \$2683.07 then 100% is \$268,307 What is The Difference Between Maximum Stock Trading Leverage and Used Stock Trading Leverage?

In the above image example, the stock trader is using \$2683.07, the total controlled amount is \$268,307, but account equity is 16,116.55, therefore used stock leverage is (\$268,307 divide by 16,116.55) = 16.64 : 1

16.64 : 1

In the stock trading account above even though the maximum stock trading leverage set stock leverage is 100:1, Used stock trading leverage is 16.64 : 1     