Leverage does not merely add risk to your trading account, in addition it adds risk to the entire financial system. Just take a look at what happened in 2008. Many well reputed banks went belly up in matter of days. How could it happen so quickly? Many of these banks have now been taking highly leveraged positions in the markets. When the markets turned, these types of banks suffered tremendous losses in matter of days and went bankrupt.
Consequently, there is a considerable amount of oversight that complements leveraged strategies. The Securities and Exchange Commission, the US Treasury, the Commodity Futures Trading Commission and different exchanges in the US regulate how much money a trader can borrow. Many brokerage firms have even stricter rules in place within their risk management. Many of these firms follow the guidelines set by the National Association of Securities Dealers and the National Futures Association.
What this means is you do not have much flexibility once you borrow from your broker to trade securities or currencies. Margin loans are highly regulated 마진거래 and you must meet the terms of one’s broker. You brokerage firms allow you to sign a margin agreement that says that you understand the risks and limits of one’s activities. You can’t have a margin account if you have the absolute minimum amount in your account something like $10,000.
You’ll need to read the fine print of the margin agreement before you begin trading on margin. When you will place a trade, you’d be asked if you are trading with cash or margin. Clicking the margin box let’s you use margin. It’s so easy but beware and know everything about how exactly to trade on margin when you do it.
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