Forex

In Forex, clients are offered leverage as high as 1:200, so the client must invest, in this case, only 1/2 percent of the position they would like to buy. In practice, the trader uses a credit, and covers only the risk of the operation (the percentage of presumed currency volatility). For example, suppose a trader utilizes a 100:1 leverage, and buys a contract valued at $100,000 with an investment of $1,000. With a 1% increase in the position, the trader would make a profit of $1000, or a 100% return on investment.