The role of margin and leverage

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The most alluring element in foreign exchange trading

Using leveraged trading can expand the utilization of funds, but you should always keep in mind that leverage can not only bring greater profits, but also greater losses. This is why at Ramon, we provide you with a range of leverage options ranging from as low as 1:1 to as high as 1:200 so that you can choose the leverage that best suits your experience and trading style.

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200:1

Flexible trading leverage between 1:1 and 1:200

Negative balance protection policy

Real-time risk exposure monitoring

No change in margin for overnight or weekend

About trading leverage

By using trading leverage, you can enlarge the deposit position in your trading account. The amount of trading leverage is calculated at a ratio, such as 50:1, 100:1, or 200:1. Assuming that your trading account has 1,000 USD and your transaction order value is 200,000 USD/JPY, then your trading leverage is equivalent to 200:1.

Why can you trade at 200 times your balance? In Ramon, whenever you use margin, you have a free short-term loan limit: This allows you to buy more than the value of your account. Without this limit, you can only buy or sell transactions worth 1,000 at a time.

Ramon can monitor the leverage ratio of customer accounts at any time, and reserves the right to change and modify the customer leverage ratio (such as reducing the leverage ratio), which applies to all Ramon accounts unless otherwise notified.

Benefits and risks of trading leverage

The undisputed advantage of trading leverage is that by owning a larger share in the market, you can obtain significantly higher profits. This clearly shows the potential of financial leverage. However, we should not forget that leverage is a double-edged sword. Even in the case of small market volatility, higher profits may have higher losses.

The higher the leverage, the greater the impact of volatility on your profit/loss. This means that even if the market volatility is small, your profits can increase exponentially. But at the same time, if the market develops in an unexpected direction, you will face the risk of losing all your deposited funds.

In order to protect you from the risks arising from the use of financial leverage, we have implemented safeguards such as margin call and stop loss, mainly the negative balance protection function. Due to the negative balance protection, your loss will never exceed your deposit balance. If this happens, Ramon will clear the excess amount.

Leverage Risk

On the one hand, by using leverage, even from a relatively small initial investment you can make considerable profit. On the other hand, your losses can also become drastic if you fail to apply proper risk management.

This is why RAMON provides a leverage range that helps you choose your preferred risk level.

Margin call

Although each customer is responsible for monitoring the profit and loss of his account, Ramon will give a margin call reminder when your account is about to close to ensure that your account will not be completely liquidated.

Once your account equity is less than 50% of the margin required to maintain open positions, we will send you a margin call email reminder to warn you that there is not enough money to maintain open positions.

Liquidation Standard

Stop loss refers to the automatic closing of a position based on the point at which you open a position. When the net value in the trading account is not greater than 20% of the required margin, the account meets the requirements for forced liquidation.