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Glossary
Leveraging/gearing
Definition
The ability to hold an investment position of greater value than that of your equity (collateral).
When leveraging (also called gearing) your investment, you only need to deposit a fraction of the current value of the instrument you are investing in.
For example, if the commodity you are trading in requires a margin of 5%, this allows you to leverage (or gear) your investment 20 times. In other words, a deposit of USD 10,000 can hold a position of USD 200,000.
When leveraging (also called gearing) your investment, you only need to deposit a fraction of the current value of the instrument you are investing in.
For example, if the commodity you are trading in requires a margin of 5%, this allows you to leverage (or gear) your investment 20 times. In other words, a deposit of USD 10,000 can hold a position of USD 200,000.