# Leverage and Multiplier: Key Features and How They Work

**Multiplier**

Multiplier allows you to trade amounts that are larger than your account balance. Your investment amount and your multiplier influence your trading results, as well as the opening fees and overnight rollover swaps.

**Example 2. **

Let's assume you go long for EUR/USD, your investment amount is €50, and your multiplier is 1. If the price goes up 10%, your profit will be €5 (€50 x 10%).

If you specify 20 as a multiplier instead, your investment amount will rise to €1,000 (€50x20), so if the asset goes 10% up, you'll earn €100 (€1,000x10%).

As you can see, your profit has been multiplied by 20, and this is how multiplier works.

Still, you've got to remember the multiplier may magnify both profits and losses, so the higher is your multiplier, the higher the risk. This is like a car speed: the more it is, the faster you reach your destination. However, a high speed brings more risks with it. This is why every car driver chooses a speed which is good for themselves depending on their experience, road surface condition and the traffic code.

**Leverage**

Leverage works differently depending on your categorization status, Retail or Professional.

**Retail Clients**

When you open your position, the margin requirements will be based upon the leverage, i.e. the leverage determines your trade amount.

This is why when you set your trade amount and your multiplier, you should also know what the leverage is for the asset class in question. With higher leverage, you will need less margin to open your position.

**Example**

Let's now assume your account balance is just €10, and you want to invest them into EUR/USD.

For major currency pairs, the leverage is 30:1, while the margin requirement is 3.33%.

To calculate your maximum trade amount (including multiplier), you should apply the following formula:

**Maximum Multiplier-Adjusted Amount **= Free Margin * Max Leverage for the asset class in question

In our example, this is **Maximum Multiplier-Adjusted Amount **= Free Margin * Max Leverage for the asset class in question300 (10*30). If you open such a position, €10 will be used as a margin.

**Professional Clients**

Once you get the Professional Client status, you can start trading without leverage. When you open your trade, you are investing your own money which will be reserved on your account, while no margin will be taken.

**Example 2. **

Let's now assume your account balance is just €10, and you want to invest them into EUR/USD.

To calculate your maximum trade amount (including multiplier), you should apply the following formula:

**Maximum Multiplier-Adjusted Amount **= Free Funds (not invested into other positions) * Max Multiplier

In our case, this is €5000 (10*500).

If you open such a position, €10 will be reserved on your account.

As you can clearly see, Professional Clients can open big trades with the same investment capital.

Both Retail and Professional Clients cannot lose more than the investment amount.

For instance, if your investment amount is €100, and your multiplier is 30, the total position value will be €3,000 (30*100). In this case, whichever status you have, your losses are limited to €100, your initial investment. Once your losses exceed those €100, your position will be closed through stop out.